Filed by e3 Filing, Computershare 1-800-973-3274 - SILVERCORP METALS INC.

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934

May 20, 2021

Commission File No. 0001-34184

SILVERCORP METALS INC.
(Translation of registrant’s name into English)

Suite 1750 - 1066 West Hastings Street
Vancouver, BC Canada V6E 3X1
(Address of principal executive office)

[Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F]

Form 20-F [ ] Form 40-F [ X ]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1) [ ]

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is “submitting” the Form 6-K in paper as permitted by Regulation S-T “Rule” 101(b)(7) [ ]

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


Dated: May 20, 2021	SILVERCORP METALS INC.

	/s/ Derek Liu
	Derek Liu
	Chief Financial Officer

EXHIBIT INDEX

EXHIBITS 99.4, 99.5, 99.6 AND 99.7 INCLUDED WITH THIS REPORT ARE HEREBY INCORPORATED BY REFERENCE AS EXHIBITS TO THE REGISTRANT'S REGISTRATION STATEMENT ON FORM F-10 (FILE NO. 333-249939), AS AMENDED AND SUPPLEMENTED, AND TO BE A PART THEREOF FROM THE DATE ON WHICH THIS REPORT IS SUBMITTED, TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS SUBSEQUENTLY FILED OR FURNISHED.


EXHIBIT	DESCRIPTION OF EXHIBIT


99.1	News Release - (May 20, 2021) Silvercorp Reports Net Income of $46.4 Million, $0.27 per Share, and Cash Flow from Operations of $85.9 Million for Fiscal 2021
99.2	Form 52-109F1 Certificate of Annual Filings - full certificate - CFO
99.3	Form 52-109F1 Certificate of Annual Filings - full certificate - CEO
99.4	Silvercorp Metals Inc. Financial Statements for year ended March 31, 2021
99.5	Silvercorp Metals Inc. MD&A for year ended March 31, 2021
99.6	Consent of Deloitte LLP
99.7	Consent of Guoliang Ma

EX-99.1 2 exhibit99-1.htm NEWS RELEASE DATED MAY 20, 2021 Exhibit 99.1

Exhibit 99.1




NEWS RELEASE

Trading Symbol:	TSX: SVM
	NYSE AMERICAN: SVM

SILVERCORP REPORTS NET INCOME OF $46.4 MILLION, $0.27 PER SHARE, AND CASH FLOW FROM OPERATIONS OF $85.9 MILLION FOR FISCAL 2021

VANCOUVER, British Columbia – May 20, 2021 – Silvercorp Metals Inc. (“Silvercorp” or the “Company”) (TSX/NYSE American: SVM) reported its financial and operating results for the fourth quarter and twelve months ended March 31, 2021 (“Fiscal 2021). All amounts are expressed in US Dollars, and figures may not add due to rounding.

FISCAL YEAR 2021 HIGHLIGHTS

Mined 964,925 tonnes of ore and milled 967,581 tonnes of ore, up 9% and 8%, respectively, compared to the prior year, with silver and lead production meeting the production guidance and zinc production beating the production guidance;
Sold approximately 6.3 million ounces of silver, 4,700 ounces of gold, 67.1 million pounds of lead, and 27.9 million pounds of zinc, up 1%, 42%, 3%, and 10%, respectively, compared to the prior year;
Revenue of $192.1 million, up 21% or $33.3 million compared to $158.8 million in the prior year;
Net income attributable to equity shareholders of $46.4 million, or $0.27 per share, up 35% compared to $34.3 million, or $0.20 per share in the prior year;
Cash cost per ounce of silver, net of by-product credits, of negative $1.80 compared to negative $1.91 in the prior year;
All-in sustaining cost per ounce of silver, net of by-product credits, of $7.49, compared to $6.86 in the prior year;
Cash flow from operations of $85.9 million, up 11% or $8.7 million compared to $77.2 million in the prior year;
Received $6.5 million (CAD$9.0 million) break fee from Guyana Goldfields Inc. (“Guyana Goldfields”) and realized a gain of $15.4 million on disposal of the shares of Guyana Goldfields;
Paid $4.4 million of dividends to the Company’s shareholders;
Invested $5.8 million in a private placement of New Pacific Metals Corp. (“NUAG”) to maintain the Company’s ownership interest;
Acquired a 26.99% interest in Whitehorse Gold Corp. (“WHG”), having a fair market value of $15.1 million as at March 31, 2021, as a result of (a) receiving 5,740,285 WHG common shares under a spin-out transaction completed by NUAG, and (b) subscribing for 5,774,000 WHG common shares at total cost of $1.3 million under a private placement;
Won an online auction to acquire the exploration rights to the Zhonghe Silver Project from the Henan provincial government of China, with the mineral rights transfer contract pending the national security clearance by the related authorities;

Acquired a 43.8% interest in the La Yesca Silver Project in Mexico through a new corporate structure, New Infini Silver Inc. for approximately $9.1 million; and
Strong balance sheet with $199.1 million in cash and cash equivalents and short-term investments, an increase of $56.6 million or 40% compared to $142.5 million as at March 31, 2020. This does not include $212.1 million in total market value of investments in associates and equity investments in other companies as at March 31, 2021.

HIGHLIGHTS FOR Q4 FISCAL 2021

Mined 163,072 tonnes of ore and milled 180,674 tonnes of ore, up 53% and 76%, respectively, compared to the prior year quarter;
Sold approximately 1.1 million ounces of silver, 700 ounces of gold, 10.9 million pounds of lead, and 4.6 million pounds of zinc, up 32%, 40%, 13%, and 50% respectively, compared to approximately 0.8 million ounces of silver, 500 ounces of gold, 9.7 million pounds of lead, and 3.1 million pounds of zinc in the prior year quarter;
Revenue of $35.7 million, up 89% or $16.8 million compared to $18.9 million in the prior year quarter;
Net income attributable to equity shareholders of $7.0 million, or $0.04 per share, compared to $3.2 million or $0.02 per share, in the prior year quarter;
Cash cost per ounce of silver, net of by-product credits, of negative $0.39 compared to negative $0.85 in the prior year quarter;
All-in sustaining cost per ounce of silver, net of by-product credits, of $12.55, compared to $15.17 in the prior year quarter; and
Cash flow from operations of $2.2 million, compared to $6.3 million in the prior year quarter. The decrease was mainly due to $9.4 million use of cash from working capital changes. Before changes in non-cash working capital, cash flows provided by operating activities in the current quarter were $11.9 million, up $2.7 million compared to $9.2 million in Q4 Fiscal 2020.

CONSOLIDATED FINANCIAL RESULTS


		Three months ended March 31,						Year ended March 31,
		2021		2020	Changes			2021		2020	Changes
Financial
Revenue (in thousands of $)	$	35,732	$	18,859	89	%	$	192,105	$	158,829	21	%
Mine operating earnings (in thousands of $)		13,404		3,204	318	%		84,162		59,374	42	%
Net earnings attributable to equity shareholders		7,021		3,163	122	%		46,376		34,274	35	%
Earning per share - basic ($/share)		0.04		0.02	100	%		0.27		0.20	35	%
Net cash generated from operating activities (in thousands of $)		2,231		6,278	-64	%		85,912		77,246	11	%
Capitalized expenditures (in thousands of $)		10,115		3,917	158	%		45,556		33,671	35	%
Cash and cash equivalents and short-term investments (in thousands of $)		199,092		142,519	40	%		199,092		142,519	40	%
Working capital (in thousands of $)		184,013		130,351	41	%		184,013		130,351	41	%
Metals sold
Silver (in thousands of ounces)		1,056		800	32	%		6,315		6,257	1	%
Gold (in thousands of ounces)		0.7		0.5	40	%		4.7		3.3	42	%
Lead (in thousands of pounds)		10,876		9,654	13	%		67,118		65,344	3	%
Zinc (in thousands of pounds)		4,580		3,059	50	%		27,914		25,401	10	%
Average Selling Price, Net of Value Added Tax and Smelter Charges
Silver ($/ounce)		20.11		12.29	64	%		17.61		13.56	30	%
Gold ($/ounce)		1,437		1,250	15	%		1,430		1,185	21	%
Lead ($/pound)		0.81		0.67	21	%		0.75		0.80	-6	%
Zinc ($/pound)		0.98		0.51	92	%		0.78		0.62	26	%


1.	Fiscal 2021 Financial Results

Net income attributable to equity shareholders of the Company in Fiscal 2021 was $46.4 million or $0.27 per share, up 35% or $12.1 million, compared to $34.3 million or $0.20 per share in Fiscal 2020.

In Fiscal 2021, the Company’s consolidated financial results were mainly impacted by i) an increase of 1%, 42%, 3%, and 10%, respectively, in silver, gold, lead and zinc sold; ii) an increase of 30%, 21%, and 26%, respectively, in the realized selling prices for silver, gold and zinc; iii) a $7.7 million gain on equity investment; offset by iv) a decrease of 6% in the realized selling price for lead, and v) a $7.7 million foreign exchange loss.

Revenue in Fiscal 2021 was $192.1 million, up 21% or $33.3 million compared to $158.8 million in Fiscal 2020. The increase was mainly due to i) an increase of $5.9 million arising from the increase in the quantities of metal sold; ii) an increase of $30.2 million arising from the increase in the realized selling price for silver, gold, and zinc; offset by iii) a decrease of $2.8 million arising from the decrease in the realized selling price for lead. Revenues from silver, gold, and base metals were $111.2 million, 6.7 million, and $74.2 million, respectively, up 31%, 72%, and 6%, respectively, compared to $84.9 million, $3.9 million, and $70.0 million in Fiscal 2020. Revenue from the Ying Mining District was $157.3 million, up 20% compared to $131.4 million in Fiscal 2020. Revenue from the GC Mine was $33.3 million, up 21% compared to $27.4 million in Fiscal 2020.

Income from mine operations in Fiscal 2021 was $84.2 million, up 42% compared to $59.4 million in Fiscal 2020. Income from mine operations at the Ying Mining District was $74.2 million, up 37% compared to $54.1 million in Fiscal 2020. Income from mine operations at the GC Mine was $9.8 million, up 72% compared to $5.7 million in Fiscal 2020.

Cash flow provided by operating activities in Fiscal 2021 was $85.9 million, up 11% compared to $77.2 million in Fiscal 2020.

The Company ended the fiscal year with $199.1 million in cash, cash equivalents and short-term investments, up 40% or $56.6 million, compared to $142.5 million as at March 31, 2020.

Working capital as at March 31, 2021 was $184.0 million, up 41% or $53.6 million, compared to $130.4 million as at March 31, 2020.


2.	Q4 Fiscal 2021 Financial Results

Net income attributable to equity shareholders of the Company in Q4 Fiscal 2021 was $7.0 million, or $0.04 per share, up 122% or $3.9 million, compared to $3.2 million, or $0.02 per share in the three months ended March 31, 2020 (“Q4 Fiscal 2020”).

Compared to the prior year quarter, the Company’s consolidated financial results in Q4 Fiscal 2021 were mainly impacted by the following: i) an increase of 32%, 40%, 13%, and 50%, respectively, in silver, gold, lead and zinc sold; ii) an increase of 64%, 15%, 21%, and 92%, respectively, in the realized selling prices for silver, gold, lead, and zinc; offset by iii) a $0.8 million foreign exchange loss, and iv) a $1.1 million loss on equity investments.

Revenue in Q4 Fiscal 2021 was $35.7 million, up 89% or $16.8 million, compared to $18.9 million in Q4 Fiscal 2020. The increase was mainly due to i) an increase of $7.7 million arising from the increase in the quantities of metal sold; and ii) an increase of $9.1 million arising from the increase in the realized selling prices. Revenue from silver, gold, and base metals was $21.2 million, 1.0 million, and $13.5 million, respectively, up 116%, 61%, and 61%, respectively, compared to $9.8 million, $0.6 million, and $8.4 million in Q4 Fiscal 2020. Revenue from the Ying Mining District was $29.5 million, up 88% compared to $15.7 million in Q4 Fiscal 2020. Revenue from the GC Mine was $6.3 million, up 97% compared to $3.2 million in Fiscal 2020.

Income from mine operations in Q4 Fiscal 2021 was $13.4 million, up 319% compared to $3.2 million in Q4 Fiscal 2020. Income from mine operations at the Ying Mining District was $11.8 million, compared to $3.0 million in Q4 Fiscal 2020. Income from mine operations at the GC Mine was $1.6 million, compared to $0.2 million in Q4 Fiscal 2020.

Cash flows provided by operating activities in Q4 Fiscal 2021 were $2.2 million, compared to $6.3 million in Q4 Fiscal 2020. The decrease was mainly due to $9.4 million use of cash from working capital changes. Before changes in non-cash working capital, cash flows provided by operating activities in the current quarter were $11.9 million, up $2.7 million compared to $9.2 million in Q4 Fiscal 2020.

CONSOLIDATED OPERATIONAL RESULTS


	Three months ended March 31,						Year ended March 31,
	2021		2020		Changes		2021		2020		Changes
Ore Prodution (tonne)
Ore mined	163,072		106,595		53	%	964,925		885,830		9	%
Ore milled	180,674		102,431		76	%	967,581		892,215		8	%
Metal Proudction
Silver (in thousands of ounces)	1,195		696		72	%	6,330		6,291		1	%
Gold (in thousands of ounces)	0.3		0.2		50	%	3.5		3.3		6	%
Lead (in thousands of pounds)	12,156		7,772		56	%	68,430		67,373		2	%
Zinc (in thousands of pounds)	4,672		3,276		43	%	28,012		25,581		10	%
Cash Costs
Cash cost per ounce of Silver, net of by-product credits ($)	(0.39	)	(0.85	)	54	%	(1.80	)	(1.91	)	6	%
All-in sustaining cost per ounce of silver, net of by-product credits ($)	12.55		15.17		-17	%	7.49		6.86		9	%
Cash production cost per tonne of ore processed ($)	85.70		68.93		24	%	72.71		68.91		6	%
All-in sustaining cost per tonne of ore processed ($)	156.36		188.57		-17	%	128.20		125.29		2	%


1.	Fiscal 2021 Operational Results

In Fiscal 2021, on a consolidated basis, the Company mined 964,925 tonnes of ore, up 9% or 79,095 tonnes, compared to 885,830 tonnes in Fiscal 2020. Ore milled in Fiscal 2021 was 967,581 tonnes, up 8% or 75,367 tonnes, compared to 892,215 tonnes in Fiscal 2020.

The Company produced approximately 6.3 million ounces of silver, 3,500 ounces of gold, 68.4 million pounds of lead, and 28.0 million pounds of zinc, up 1%, 6%, 2%, and 10%, respectively, compared to 6.3 million ounces of silver, 3,300 ounces of gold, 67.4 million pounds of lead, and 25.6 million pounds of zinc in Fiscal 2020.

In Fiscal 2021, the consolidated cash production cost per tonne of ore processed in Fiscal 2021 was $72.71, up 6% compared to $68.91 in Fiscal 2020, in line with the Company’s annual guidance. The consolidated all-in sustaining production cost per tonne of ore processed was $128.20, an increase of 2% compared to $125.29 in Fiscal 2020, also in line with the Company’s annual guidance.

The consolidated cash cost per ounce of silver, net of by-product credits, was negative $1.80, compared to negative $1.91 in the prior year. The increase was mainly due to an increase of 6% in cash production cost per tonne of ore processed, offset by an increase of $0.99 in by-product credits per ounce of silver. Sales from lead and zinc in Fiscal 2021 amounted to $72.3 million, up 7% or $4.6 million, compared to $67.7 million in Fiscal 2020.

The consolidated all-in sustaining cost per ounce of silver, net of by-product credits, was $7.49, compared to $6.86 in Fiscal 2020. The increase was mainly due to an increase of 2% in all-in sustaining production cost per tonne of ore processed, offset by an increase of $0.99 in by-product credits per ounce of silver.

In Fiscal 2021, on a consolidated basis, a total of 254,900 metres or $8.7 million worth of diamond drilling were completed (Fiscal 2020 – 108,156 metres or $3.5 million), of which approximately 196,320 metres or $5.0 million worth of underground drilling were expensed as part of mining costs (Fiscal 2020 – 108,156 metres or $3.5 million) and approximately 58,580 metres or $3.7 million worth of surface drilling were capitalized (Fiscal 2020 – nil). Mining preparation tunnelling of 34,637 metres that costed $8.9 million was completed and expensed as part of mining costs (Fiscal 2020 – 38,403 m or $10.3 million), and 85,221 metres or $31.5 million worth of tunnels, raises, ramps and declines (Fiscal 2020 – 73,567 metres or $26.3 million) were completed and capitalized.


2.	Q4 Fiscal 2021 Operational Results

In Q4 Fiscal 2021, the Company mined 163,072 tonnes of ore, up 53% or 56,477 tonnes, compared to 106,595 tonnes in Q4 Fiscal 2020. Ore milled in Q4 Fiscal 2021 was 180,674 tonnes, up 76% or 78,243 tonnes, compared to 102,431 tonnes in Q4 Fiscal 2020. The increase was mainly due to an extra month’s operational shutdown due to COVID-19 in Q4 Fiscal 2020.

The Company produced approximately 1.2 million ounces of silver, 300 ounces of gold, 12.2 million pounds of lead, and 4.7 million pounds of zinc, up 72%, 50%, 56%, and 43%, respectively, compared to approximately 0.7 million ounces of silver, 200 ounces of gold, 7.8 million pounds of lead, and 3.3 million pounds of zinc in Q4 Fiscal 2020.

In Q4 Fiscal 2021, the consolidated cash production cost per tonne of ore processed was $85.70, up 24% compared to $68.93 in Q4 Fiscal 2020. The increase was mainly due to certain fixed overhead costs related to mining operations expensed directly as mine general and administrative expense during the extra month operational shut-down in Q4 Fiscal 2020. The consolidated all-in sustaining production cost per tonne was $156.36, down 17% compared to $188.57 in Q4 Fiscal 2020.The decrease was mainly due to higher production resulting in lower per tonne fixed costs allocation.

In Q4 Fiscal 2021, the consolidated cash cost per ounce of silver, net of by-product credits, was negative $0.39, compared to negative $0.85 in Q4 Fiscal 2020. The increase was mainly due to the increase in per tonne cash production cost as discussed above, offset by an increase of $2.44 in by-product credits per ounce of silver.

In Q4 Fiscal 2021, the consolidated all-in sustaining cost per ounce of silver, net of by-product credits, was $12.55, compared to $15.17 in Q4 Fiscal 2020. The decrease was mainly due to the decrease in per tonne all-in sustaining production cost as discussed above and an increase of $0.18 in all-in sustaining costs per ounce of silver.

In Q4 Fiscal 2021, on a consolidated basis, a total of 49,459 metres or $1.6 million worth of diamond drilling were completed (Q4 Fiscal 2020 – 14,612 metres or $0.5 million), of which approximately 41,572 metres or $0.8 million worth of underground drilling were expensed as part of mining costs (Q4 Fiscal 2020 – 14,612 metres or $0.5 million), and approximately 7,887 metres or $0.8 million worth of surface drilling) were capitalized (Q4 Fiscal 2020 – nil. Mining preparation tunnelling of 7,015 metres that costed $1.5 million was completed and expensed as part of mining costs (Q4 Fiscal 2020 – 2,163 metres or $0.7 million), and 10,803 metres or $4.7 million worth of tunnels, raises, ramps and declines were completed and capitalized (Q4 Fiscal 2020 – 9,830 metres or $4.3 million).

INDIVIDUAL MINE OPERATING PERFORMANCE


Ying Mining District	Q4 2021	Q3 2021		Q2 2021		Q1 2021		Q4 2020	Year ended Mar 31,
	March 31, 2021	December 31, 2020		September 30, 2020		June 30, 2020		March 31, 2020	2021		2020
Ore Prodution (tonne)
Ore mined	112,561	182,268		181,020		174,176		69,379	650,025		598,197
Ore milled	131,725	162,905		179,083		177,689		69,188	651,402		601,605
Head grades
Silver (gram/tonne)	280	297		288		293		297	290		309
Lead (%)	3.9	4.3		4.4		4.6		4.6	4.3		4.6
Zinc (%)	0.8	0.8		0.7		0.8		1.0	0.8		0.9
Recovery rates
Silver (%)	93.7	93.9		94.4		94.7		95.3	94.2		96.0
Lead (%)	95.1	96.4		96.1		96.2		95.7	96.0		95.9
Zinc (%)	65.0	63.3		57.9		63.8		67.7	62.4		63.2
Cash Costs
Cash cost per ounce of Silver, net of by-product credits ($)	1.20	(1.12	)	(0.14	)	(0.87	)	0.30	(0.39	)	(1.18	)
All-in sustaining cost per ounce of silver, net of by-product credits ($)	10.00	5.24		6.63		4.14		11.86	6.09		5.49
Cash production cost per tonne of ore processed ($)	98.13	83.09		80.06		76.21		83.59	83.01		77.08
All-in sustaining cost per tonne of ore processed ($)	155.14	133.07		132.36		116.99		195.78	132.54		132.52
Metal Proudction
Silver (in thousands of ounces)	1,083	1,464		1,525		1,544		614	5,615		5,592
Gold (in thousands of ounces)	0.3	0.9		1.1		1.2		0.2	3.5		3.3
Lead (in thousands of pounds)	10,504	14,361		16,080		16,941		6,573	57,886		56,436
Zinc (in thousands of pounds)	1,496	1,857		1,643		1,920		999	6,916		7,337

In Fiscal 2021, a total of 208,904 metres or $6.9 million worth of diamond drilling (Fiscal 2020 – 85,643 metres or $2.5 million) were completed at the Ying Mining District, of which a total of 150,324 metres or $3.2 million worth of underground diamond drilling (Fiscal 2020 – 85,643 or $2.5 million) were expensed as part of mining costs and a total of 58,580 metres or $3.7 million worth of surface drilling (Fiscal 2020 – nil) were capitalized. In addition, mining preparation tunnelling of 22,918 metres that costed $6.7 million were completed and expensed as mining preparation costs (Fiscal 2020 – 19,088 metres or $5.7 million), and approximately 73,350 metres or

$27.4 million worth of horizontal tunnels, raises, ramps and declines were completed and capitalized (Fiscal 2020 – 70,240 metres or $23.9 million).


GC Mine	Q4 2021		Q3 2021		Q2 2021		Q1 2021		Q4 2020		Year ended Mar 31,
	March 31, 2021		December 31, 2020		September 30, 2020		June 30, 2020		March 31, 2020		2021		2020
Ore Prodution (tonne)
Ore mined	50,511		97,177		86,833		80,379		37,216		314,900		287,633
Ore milled	48,949		97,743		84,850		84,637		33,243		316,179		290,610
Head grades
Silver (gram/tonne)	87		82		81		93		94		85		97
Lead (%)	1.7		1.4		1.8		1.9		1.8		1.7		1.9
Zinc (%)	3.3		3.5		3.4		3.4		3.5		3.4		3.3
Recovery rates
Silver (%)	81.9		82.6		82.5		82.8		80.7		82.5		77.4
Lead (%)	89.7		89.6		89.2		89.8		90.4		89.6		89.3
Zinc (%)	88.2		89.7		87.3		87.3		87.7		88.2		86.0
Cash Costs
Cash cost per ounce of Silver, net of by-product credits ($)	(12.80	)	(14.43	)	(12.70	)	(6.59	)	(10.03	)	(11.48	)	(7.65	)
All-in sustaining cost per ounce of silver, net of by-product credits ($)	0.52		(1.05	)	(1.78	)	2.41		8.31		-		0.77
Cash production cost per tonne of ore processed ($)	58.56		54.07		48.47		47.08		41.94		51.44		51.91
All-in sustaining cost per tonne of ore processed ($)	87.69		78.63		69.07		65.84		88.18		74.09		69.33
Metal Proudction
Silver (in thousands of ounces)	112		212		182		209		82		716		699
Lead (in thousands of pounds)	1,652		2,750		3,006		3,136		1,199		10,544		10,937
Zinc (in thousands of pounds)	3,176		6,816		5,490		5,613		2,277		21,096		18,244

In Fiscal 2021, approximately 45,996 metres or $1.8 million worth of underground diamond drilling (Fiscal 2020 – 22,513 metres or $1.0 million) and 11,719 metres or $2.2 million worth of tunnelling (Fiscal 2020 – 19,315 metres or $4.6 million) were completed and expensed as mining preparation costs at the GC Mine. In addition, approximately 11,871 metres or $3.9 million of horizontal tunnels, raises, ramps, and declines (Fiscal 2020 –3,327 metres or $2.4 million) were completed and capitalized.

UPDATE ON MINING CONTRACTS RENEWAL AT THE YING MINING DISCTRICT

The Company updates that the Company has successfully negotiated and renewed contracts with all mining contractors at the Ying Mining District, except one that worked at the LME mine. The renewed contracts with terms of two to three years represent an overall 14.5% increase compared to previous contracts, reflecting i) increased social welfare contribution for the contractors’ workers; ii) increased insurance coverage for contractors’ workers; and iii) increases in the prices per tonne ore mined and per meter of tunneling developed by contractors. Based on the renewed contracts and assuming the same work done in Fiscal 2021, the total annual increase is estimated at $5.0 million; however, this is expected to be offset by reduced tunneling going forward as recent drilling activities in previously mining areas has defined resources that require minimal development.

The previous mining contractor at the LME mine was terminated as no agreement was able to reach. The Company has hired most of the previous workers to work at the mine as internal contractors.

CONFERENCE CALL DETAILS

A conference call to discuss these results will be held tomorrow, Friday, May 21, at 9:00 am PDT (12:00 pm EDT). To participate in the conference call, please dial the numbers below.

Canada/USA TF: 888-664-6383

International Toll: 416-764-8650

Conference ID: 57492576

Participants should dial-in 10 – 15 minutes prior to the start time. A replay of the conference call and transcript will be available on the Company’s website at www.silvercorp.ca.

Mr. Guoliang Ma, P.Geo., Manager of Exploration and Resources of the Company, is the Qualified Person as defined by National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) and has reviewed and given consent to the technical information contained in this news release.

This earnings release should be read in conjunction with the Company's Management Discussion & Analysis (“MD&A”), Financial Statements and Notes to Financial Statements for the corresponding period, which have

been posted on SEDAR under the Company’s profile at www.sedar.com and are also available on the Company's website at www.silvercorp.ca. This earnings release refers to various alternative performance (non-IFRS) measures, such as cash cost and all-in sustaining cost per ounce of silver, net of by-product credits, cash production cost and all-in sustaining production cost per tonne of ore processed, and working capital. These measures are widely used in the mining industry as a benchmark for performance, but do not have standardized meanings under IFRS as an indicator of performance, and may differ from methods used by other companies with similar description. Accordingly, to facilitate a better understanding of these measures as calculated by the Company, please refer to section 12 of the corresponding MD&A for detailed description and reconciliation.

About Silvercorp

Silvercorp is a profitable Canadian mining company producing silver, lead and zinc metals in concentrates from mines in China. The Company’s goal is to continuously create healthy returns to shareholders through efficient management, organic growth and the acquisition of profitable projects. Silvercorp balances profitability, social and environmental relationships, employees’ wellbeing, and sustainable development. For more information, please visit our website at www.silvercorp.ca.

For further information

Silvercorp Metals Inc. Lon Shaver Vice President Phone: (604) 669-9397 Toll Free 1(888) 224-1881 Email: investor@silvercorp.ca Website: www.silvercorp.ca

CAUTIONARY DISCLAIMER - FORWARD-LOOKING STATEMENTS

Certain of the statements and information in this news release constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and “forward-looking information” within the meaning of applicable Canadian provincial securities laws (collectively, “forward-looking statements”). Any statements or information that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects”, “is expected”, “anticipates”, “believes”, “plans”, “projects”, “estimates”, “assumes”, “intends”, “strategies”, “targets”, “goals”, “forecasts”, “objectives”, “budgets”, “schedules”, “potential” or variations thereof or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements. Forward-looking statements relate to, among other things: the price of silver and other metals; the accuracy of mineral resource and mineral reserve estimates at the Company’s material properties; the sufficiency of the Company’s capital to finance the Company’s operations; estimates of the Company’s revenues and capital expenditures; estimated production from the Company’s mines in the Ying Mining District and the GC Mine; timing of receipt of permits and regulatory approvals; availability of funds from production to finance the Company’s operations; and access to and availability of funding for future construction, use of proceeds from any financing and development of the Company’s properties.

Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those reflected in the forward-looking statements, including, without limitation, risks relating to: global economic and social impact of COVID-19; fluctuating commodity prices; calculation of resources, reserves and mineralization and precious and base metal recovery; interpretations and assumptions of mineral resource and mineral reserve estimates; exploration and development programs; feasibility and engineering reports; permits and licences; title to properties; property interests; joint venture partners; acquisition of commercially mineable mineral rights; financing; recent market events and conditions; economic factors affecting the Company; timing, estimated amount, capital and operating expenditures and economic returns of future production; integration of future acquisitions into the Company’s existing operations; competition; operations and political conditions; regulatory environment in China and Canada; environmental risks; foreign exchange rate fluctuations; insurance; risks and hazards of mining operations; key personnel; conflicts of interest; dependence on management; internal control over financial reporting; and bringing actions and enforcing judgments under U.S. securities laws.

This list is not exhaustive of the factors that may affect any of the Company’s forward-looking statements. Forward-looking statements are statements about the future and are inherently uncertain, and actual achievements of the Company or other

future events or conditions may differ materially from those reflected in the forward-looking statements due to a variety of risks, uncertainties and other factors, including, without limitation, those referred to in the Company’s Annual Information Form under the heading “Risk Factors”. Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated, described or intended. Accordingly, readers should not place undue reliance on forward-looking statements.

The Company’s forward-looking statements are based on the assumptions, beliefs, expectations and opinions of management as of the date of this news release, and other than as required by applicable securities laws, the Company does not assume any obligation to update forward-looking statements if circumstances or management’s assumptions, beliefs, expectations or opinions should change, or changes in any other events affecting such statements. For the reasons set forth above, investors should not place undue reliance on forward-looking statements.

EX-99.2 3 exhibit99-2.htm CERTIFICATE OF ANNUAL FILINGS - CFO Exhibit 99.2

Exhibit 99.2

Form 52-109F1
Certification of Annual Filings
Full Certificate

I, Rui Feng, Chief Executive Officer of Silvercorp Metals Inc. certify the following:

1.	*Review:* I have reviewed the AIF, if any, annual financial statements and annual MD&A, including, for greater certainty, all documents and information that are incorporated by reference in the AIF (together, the “annual filings”) of Silvercorp Metals Inc. (the “issuer”) for the financial year ended March 31, 2021.

2.	*No misrepresentations:* Based on my knowledge, having exercised reasonable diligence, the annual filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, for the period covered by the annual filings.

3.	*Fair presentation:* Based on my knowledge, having exercised reasonable diligence, the annual financial statements together with the other financial information included in the annual filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the annual filings.

4.	*Responsibility:* The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.

5.	*Design:* Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the financial year end


(a)	designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

	(i)	material information relating to the issuer is made known to us by others, particularly during the period in which the annual filings are being prepared; and

	(ii)	information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

(b)	designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.

5.1	*Control framework:* The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is the *Internal Control – Integrated Framework* issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

5.2	*ICFR – material weakness relating to design:* N/A

5.3	*Limitation on scope of design:* N/A

6.	*Evaluation:* The issuer’s other certifying officer(s) and I have


(a)	evaluated, or caused to be evaluated under our supervision, the effectiveness of the issuer’s DC&P at the financial year end and the issuer has disclosed in its annual MD&A our conclusions about the effectiveness of DC&P at the financial year end based on that evaluation; and

(b)	evaluated, or caused to be evaluated under our supervision, the effectiveness of the issuer’s ICFR at the financial year end and the issuer has disclosed in its annual MD&A

	(i)	our conclusions about the effectiveness of ICFR at the financial year end based on that evaluation; and

	(ii)	N/A.

7.	*Reporting changes in ICFR:* The issuer has disclosed in its annual MD&A any change in the issuer’s ICFR that occurred during the period beginning on January 1, 2021 and ended on March 31, 2021 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

8.	*Reporting to the issuer’s auditors and board of directors or audit committee:* The issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of ICFR, to the issuer’s auditors, and the board of directors or the audit committee of the board of directors any fraud that involves management or other employees who have a significant role in the issuer’s ICFR.

Date: May 20, 2021

/s/ Rui Feng
Rui Feng Chief Executive Officer

EX-99.3 4 exhibit99-3.htm CERTIFICATE OF ANNUAL FILINGS - CEO Exhibit 99.3

Exhibit 99.3

Form 52-109F1
Certification of Annual Filings
Full Certificate

I, Derek Liu, Chief Financial Officer of Silvercorp Metals Inc. certify the following:

1.	*Review:* I have reviewed the AIF, if any, annual financial statements and annual MD&A, including, for greater certainty, all documents and information that are incorporated by reference in the AIF (together, the “annual filings”) of Silvercorp Metals Inc. (the “issuer”) for the financial year ended March 31, 2021.

2.	*No misrepresentations:* Based on my knowledge, having exercised reasonable diligence, the annual filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, for the period covered by the annual filings.

3.	*Fair presentation:* Based on my knowledge, having exercised reasonable diligence, the annual financial statements together with the other financial information included in the annual filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the annual filings.

4.	*Responsibility:* The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.

5.	*Design:* Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the financial year end


(a)	designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

	(i)	material information relating to the issuer is made known to us by others, particularly during the period in which the annual filings are being prepared; and

	(ii)	information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

(b)	designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.

5.1	*Control framework:* The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is the *Internal Control – Integrated Framework* issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

5.2	*ICFR – material weakness relating to design:* N/A

5.3	*Limitation on scope of design:* N/A

6.	*Evaluation:* The issuer’s other certifying officer(s) and I have


(a)	evaluated, or caused to be evaluated under our supervision, the effectiveness of the issuer’s DC&P at the financial year end and the issuer has disclosed in its annual MD&A our conclusions about the effectiveness of DC&P at the financial year end based on that evaluation; and

(b)	evaluated, or caused to be evaluated under our supervision, the effectiveness of the issuer’s ICFR at the financial year end and the issuer has disclosed in its annual MD&A

	(i)	our conclusions about the effectiveness of ICFR at the financial year end based on that evaluation; and

	(ii)	N/A.

7.	*Reporting changes in ICFR:* The issuer has disclosed in its annual MD&A any change in the issuer’s ICFR that occurred during the period beginning on January 1, 2021 and ended on March 31, 2021 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

8.	*Reporting to the issuer’s auditors and board of directors or audit committee:* The issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of ICFR, to the issuer’s auditors, and the board of directors or the audit committee of the board of directors any fraud that involves management or other employees who have a significant role in the issuer’s ICFR.

Date: May 20, 2021

/s/ Derek Liu
Derek Liu
Chief Financial Officer

EX-99.4 5 exhibit99-4.htm FINANCIAL STATEMENTS FOR YEAR ENDED MARCH 31, 2021 Exhibit 99.4

Exhibit 99.4

SILVERCORP METALS INC.

CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2021 and 2020
(Expressed in thousands of US dollars, except per share and share data, unless otherwise stated)

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of Silvercorp Metals Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated statements of financial position of Silvercorp Metals Inc. and subsidiaries (the “Company”) as of March 31, 2021 and 2020, the related consolidated statements of income, comprehensive income, changes in equity, and cash flows, for each of the two years in the period ended March 31, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2021 and 2020, and its financial performance and its cash flows for each of the two years in the period ended March 31, 2021, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of March 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated May 20, 2021, expressed an unqualified opinion on the Company’s internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Impairment - Assessment of Whether Indicators of Impairment or Impairment Reversal Exist in Non-financial Assets - Refer to Note 2 to the Financial Statements

Critical Audit Matter Description

The Company’s determination of whether or not an indication of impairment or impairment reversal exists at the cash generating unit level requires significant management judgment. Changes in metal price forecasts, estimated future costs of production, estimated future capital costs, the amount of recoverable mineral reserves and mineral resources and/or adverse or favorable current economics can result in a write-down or write-up of the carrying amounts of the Company’s mining interests.

While there are several factors that are required to determine whether or not an indicator of impairment or impairment reversal exists, the judgements with the highest degree of subjectivity are future commodity prices (for both silver and lead), forecast production output (for both silver and lead), and changes in market conditions. Auditing these estimates and market conditions required a high degree of subjectivity in applying audit procedures and in evaluating the results of those procedures. This resulted in an increased extent of audit effort, including the involvement of fair value specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the future commodity prices (for both silver and lead), forecast production output (for both silver and lead), and the changes in market conditions in assessing indicators of impairment or impairment reversal included the following, among others:

Evaluated the effectiveness of controls over management’s assessment of whether there are indicators of impairment or impairment reversal.
Evaluated management’s ability to accurately forecast future production output by:

Assessing the methodology used in management’s determination of the future production, and;
Comparing management’s future production to historical data.

With the assistance of fair value specialists, assessed if changes in market conditions could likely affect the mining interests’ recoverable amounts materially by:
- Evaluating the future commodity prices by comparing management forecasts to third party pricing sources;
- Evaluating if there were any significant changes in the market interest rates;
- Assessing implied in-situ multiples in comparable market transactions.

/s/ Deloitte LLP

Chartered Professional Accountants
Vancouver, Canada
May 20, 2021

We have served as the Company’s auditor since 2013.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of Silvercorp Metals Inc.

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Silvercorp Metals Inc. and subsidiaries (the “Company”) as of March 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of March 31, 2021, based on criteria established in Internal Control -Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended March 31, 2021, of the Company and our report dated May 20, 2021, expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Deloitte LLP

Chartered Professional Accountants
Vancouver, Canada
May 20, 2021

SILVERCORP METALS INC.

Consolidated Statements of Financial Position

(Expressed in thousands of U.S. dollars)


			As at March 31,		As at March 31,
	Notes		2021		2020
ASSETS
Current Assets
Cash and cash equivalents	23	$	118,735	$	65,777
Short-term investments	4		80,357		76,742
Trade and other receivables			1,485		1,178
Current portion of lease receivable	10		213		186
Inventories	5		9,768		8,430
Due from related parties	15		847		1,519
Income tax receivable			4,978		1,093
Prepaids and deposits			4,806		3,254
			221,189		158,179
Non-current Assets
Long-term prepaids and deposits			409		390
Long-term portion lease receivable	10		183		348
Reclamation deposits			8,513		9,230
Investment in associates	6		53,457		44,555
Other investments	7		15,733		8,750
Plant and equipment	8		75,729		66,722
Mineral rights and properties	9		277,429		224,586
TOTAL ASSETS		$	652,642	$	512,760
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable and accrued liabilities		$	30,298	$	23,129
Current portion of lease obligation	10		657		567
Deposits received			4,857		3,195
Income tax payable			1,363		937
			37,175		27,828
Non-current Liabilities
Long-term portion of lease obligation	10		1,084		1,502
Deferred income tax liabilities	19		40,792		35,758
Environmental rehabilitation	11		7,863		8,700
Total Liabilities			86,914		73,788
Equity
Share capital			250,199		243,926
Equity reserves			29,469		(21,142	)
Retained earnings			187,906		145,898
Total equity attributable to the equity holders of the Company			467,574		368,682
Non-controlling interests	14		98,154		70,290
Total Equity			565,728		438,972
TOTAL LIABILITIES AND EQUITY		$	652,642	$	512,760

Approved on behalf of the Board:

(Signed) David Kong
Director

(Signed) Rui Feng
Director

See accompanying notes to the consolidated financial statements

SILVERCORP METALS INC.

Consolidated Statements of Income

(Expressed in thousands of U.S. dollars, except numbers for share and per share figures)


			Year ended March 31,
	Notes		2021			2020
Revenue	22 (b)(c)	$	192,105		$	158,829
Cost of mine operations
Production costs			69,544			62,029
Depreciation and amortization			21,434			20,715
Mineral resource taxes			5,004			4,540
Government fees and other taxes	17		2,374			2,115
General and administrative	16		9,587			10,056
			107,943			99,455
Income from mine operations			84,162			59,374
Corporate general and administrative	16		12,365			10,094
Property evaluation and business development	7		(3,237	)		679
Foreign exchange loss (gain)			7,746			(4,103	)
Loss on disposal of plant and equipment	8		293			461
Gain on disposal of mineral rights and properties	9		-			(1,477	)
Share of loss in associates	6		1,846			1,276
Dilution gain on investment in associate	6		-			(723	)
Reclassification of other comprehensive income upon
ownership dilution of investment in associate			-			(21	)
Gain on equity investments designated as FVTPL	7		(7,732	)		-
Other expense			1,157			1,026
Income from operations			71,724			52,162
Finance income	18		3,767			4,023
Finance costs	18		(1,988	)		(2,073	)
Income before income taxes			73,503			54,112
Income tax expense	19		12,994			8,909
Net income		$	60,509		$	45,203
Attributable to:
Equity holders of the Company		$	46,376		$	34,274
Non-controlling interests	14		14,133			10,929
		$	60,509		$	45,203
Earnings per share attributable to the equity holders of the Company
Basic earnings per share		$	0.27		$	0.20
Diluted earnings per share		$	0.26		$	0.20
Weighted Average Number of Shares Outstanding - Basic			174,868,256			171,713,263
Weighted Average Number of Shares Outstanding - Diluted			177,074,004			174,079,387

See accompanying notes to the consolidated financial statements

SILVERCORP METALS INC.

Consolidated Statements of Comprehensive Income

(Expressed in thousands of U.S. dollars)


			Year ended March 31,
	Notes		2021			2020
Net income		$	60,509		$	45,203
Other comprehensive income (loss), net of taxes:
Items that may subsequently be reclassified to net income or loss:
Currency translation adjustment, net of tax of $nil			44,032			(24,312	)
Share of other comprehensive (income) loss in associate	6		(2,324	)		1,077
Reclassification to net income upon ownership dilution of investment in associate			-			(21	)
Items that will not subsequently be reclassified to net income or loss:
Change in fair value on equity investments designated as FVTOCI, net of tax of $nil	7		12,551			249
Other comprehensive income (loss), net of taxes		$	54,259		$	(23,007	)
Attributable to:
Equity holders of the Company		$	49,039		$	(19,892	)
Non-controlling interests	14		5,220			(3,115	)
		$	54,259		$	(23,007	)
Total comprehensive income		$	114,768		$	22,196
Attributable to:
Equity holders of the Company		$	95,415		$	14,382
Non-controlling interests			19,353			7,814
		$	114,768		$	22,196

See accompanying notes to the consolidated financial statements

SILVERCORP METALS INC.

Consolidated Statements of Cash Flows

(Expressed in thousands of U.S. dollars)


			Year ended March 31,
	Notes		2021			2020
Cash provided by
Operating activities
Net income		$	60,509		$	45,203
Add (deduct) items not affecting cash:
Finance costs	18		1,988			2,073
Depreciation, amortization and depletion			23,224			22,673
Share of loss in associates	6		1,846			1,276
Dilution gain on investment in associate	6		-			(723	)
Reclassification of other comprehensive loss upon ownership dilution
of investment in associate			-			(21	)
Income tax expense	19		12,994			8,909
Gain on equity investments designated as FVTPL	7		(7,732	)		-
Loss on disposal of plant and equipment	8		293			461
Gain on disposal of mineral rights and properties	9		-			(1,477	)
Share-based compensation			4,307			2,669
Reclamation expenditures			(150	)		(385	)
Income taxes paid			(14,347	)		(5,012	)
Interest paid			(95	)		(162	)
Changes in non-cash operating working capital	23		3,075			1,762
Net cash provided by operating activities			85,912			77,246
Investing activities
Mineral rights and properties
Capital expenditures			(35,661	)		(27,904	)
Acquisition	3		(7,566	)		-
Proceeds on disposals	9		295			6,146
Plant and equipment
Additions			(8,972	)		(7,400	)
Proceeds on disposals	8		51			10
Reclamation deposits
Paid			(460	)		(1,727	)
Refund			1,855			-
Other investments
Acquisition	7		(12,708	)		(7,851	)
Proceeds on disposals	7		19,301			8,454
Investment in associate	6		(7,131	)		(7,030	)
Net redemptions (purchases) of short-term investments			9,826			(33,606	)
Principal received on lease receivable	10		196			118
Net cash used in investing activities			(40,974	)		(70,790	)
Financing activities
Related parties
Payments made	15		(744	)		(1,436	)
Repayments received	15		1,423			2,922
Bank loan
Repayment			-			(4,369	)
Principal payments on lease obligation	10		(563	)		(503	)
Non-controlling interests
Contribution	14		2,500			-
Distribution	14		(3,239	)		(3,259	)
Cash dividends distributed	12 (c)		(4,368	)		(4,287	)
Proceeds from issuance of common shares			3,538			8,001
Net cash used in financing activities			(1,453	)		(2,931	)
Effect of exchange rate changes on cash and cash equivalents			9,473			(5,189	)
Increase (decrease) in cash and cash equivalents			52,958			(1,664	)
Cash and cash equivalents, beginning of the year			65,777			67,441
Cash and cash equivalents, end of the year		$	118,735		$	65,777
Supplementary cash flow information	23

See accompanying notes to the consolidated financial statements

SILVERCORP METALS INC.

Consolidated Statements of Changes in Equity

(Expressed in thousands of U.S. dollars, except numbers for share figures)


		Share capital				Equity reserves
	Notes	Number of shares		Amount		Share option reserve			Reserves		Accumulated other loss			Retained earnings			Total equity attributable to the equity holders of the Company			Non-controlling interests			Total equity
Balance, April 1, 2019		169,842,052	$	231,269	$	15,898		$	25,409	$	(41,864	)	$	116,734		$	347,446		$	65,735		$	413,181
Adjustment upon adoption of IFRS 16		-		-		-			-		167			(823	)		(656	)		-			(656	)
Options exercised		3,833,406		11,003		(3,002	)		-		-			-			8,001			-			8,001
Restricted share units vested		141,376		527		(527	)		-		-			-			-			-			-
Share-based compensation		-		-		2,669			-		-			-			2,669			-			2,669
Dividends declared		-		-		-			-		-			(4,287	)		(4,287	)		-			(4,287	)
Distribution to non-controlling interests		-		-		-			-		-			-			-			(3,259	)		(3,259	)
Disposal of common shares held by associate		-		1,127		-			-		-			-			1,127			-			1,127
Comprehensive (loss) income		-		-		-			-		(19,892	)		34,274			14,382			7,814			22,196
Balance, March 31, 2020		173,816,834	$	243,926	$	15,038		$	25,409	$	(61,589	)	$	145,898		$	368,682		$	70,290		$	438,972
Options exercised		1,553,338		4,824		(1,286	)		-		-			-			3,538			-			3,538
Restricted share units vested		372,372		1,449		(1,449	)		-		-			-			-			-			-
Share-based compensation		-		-		4,307			-		-			-			4,307			-			4,307
Dividends declared	12(c)	-		-		-			-		-			(4,368	)		(4,368	)		-			(4,368	)
Acquisition of La Yesca	3	-		-		-			-		-						-			9,250			9,250
Contribution from non-controlling interests	14	-		-		-			-		-			-			-			2,500			2,500
Distribution to non-controlling interests	14	-		-		-			-		-			-			-			(3,239	)		(3,239	)
Comprehensive income		-		-		-			-		49,039			46,376			95,415			19,353			114,768
Balance, March 31, 2021		175,742,544	$	250,199	$	16,610		$	25,409	$	(12,550	)	$	187,906		$	467,574		$	98,154		$	565,728

See accompanying notes to the consolidated financial statements

SILVERCORP METALS INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except per share and share data, unless otherwise stated)


1.	CORPORATE INFORMATION

Silvercorp Metals Inc., along with its subsidiary companies (collectively the “Company”), is engaged in the acquisition, exploration, development, and mining of mineral properties. The Company’s producing mines and other current exploration and development projects are located in China.

The Company is a publicly listed company incorporated in the Province of British Columbia, Canada, with limited liability under the legislation of the Province of British Columbia. The Company’s shares are traded on the Toronto Stock Exchange and NYSE American.

The head office, registered address and records office of the Company are located at 1066 West Hastings Street, Suite 1750, Vancouver, British Columbia, Canada, V6E 3X1.


2.	SIGNIFICANT ACCOUNTING POLICIES

(a)Statement of Compliance

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). The policies applied in these consolidated financial statements are based on IFRS in effect as of March 31, 2021.

These consolidated financial statements were authorized for issue in accordance with a resolution of the Board of Directors dated on May 19, 2021.

(b)Basis of Consolidation

These consolidated financial statements include the accounts of the Company and its wholly or partially owned subsidiaries.

Subsidiaries are consolidated from the date on which the Company obtains control up to the date of the disposition of control. Control is achieved when the Company has power over the subsidiary, is exposed or has rights to variable returns from its involvement with the subsidiary; and has the ability to use its power to affect its returns.

For non-wholly-owned subsidiaries over which the Company has control, the net assets attributable to outside equity shareholders are presented as “non-controlling interests” in the equity section of the consolidated statements of financial position. Net income for the period that is attributable to the non-controlling interests is calculated based on the ownership of the non-controlling interest shareholders in the subsidiary. Adjustments to recognize the non-controlling interests’ share of changes to the subsidiary’s equity are made even if this results in the non-controlling interests having a deficit balance. Changes in the Company’s ownership interest in a subsidiary that do not result in a loss of control are recorded as equity transactions. The carrying amount of non-controlling interests is adjusted to reflect the change in the non-controlling interests’ relative interests in the subsidiary and the difference between the adjustment to the carrying amount of non-controlling interest and the Company’s share of proceeds received and/or consideration paid is recognized directly in equity and attributed to equity holders of the Company.

SILVERCORP METALS INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except per share and share data, unless otherwise stated)

Balances, transactions, revenues and expenses between the Company and its subsidiaries are eliminated on consolidation.

Details of the Company’s significant subsidiaries which are consolidated are as follows:


			Proportion of ownership interest held
		Country of	March 31,	March 31,
Name of subsidiaries	Principal activity	incorporation	2021	2020	Mineral properties
Silvercorp Metals China Inc.	Holding company	Canada	100%	100%
Silvercorp Metals (China) Inc.	Holding company	China	100%	100%
0875786 B.C. LTD.	Holding company	Canada	100%	100%
Fortune Mining Limited	Holding company	BVI (i)	100%	100%
Fortune Copper Limited	Holding company	BVI	100%	100%
Fortune Gold Mining Limited	Holding company	BVI	100%	100%
Victor Resources Ltd.	Holding company	BVI	100%	100%
Yangtze Mining Ltd.	Holding company	BVI	100%	100%
Victor Mining Ltd.	Holding company	BVI	100%	100%
Yangtze Mining (H.K.) Ltd.	Holding company	Hong Kong	100%	100%
Fortune Gold Mining (H.K.) Limited	Holding company	Hong Kong	100%	100%
Wonder Success Limited	Holding company	Hong Kong	100%	100%
New Infini Silver Inc. (“New Infini”)	Holding company	Canada	43.75%	N/A
Infini Metals Inc.	Holding company	BVI	43.75%	N/A
Infini Resources (Asia) Co. Ltd.	Holding company	Hong Kong	43.75%	N/A
Golden Land (Asia) Ltd.	Holding company	Hong Kong	43.75%	N/A
Henan Huawei Mining Co. Ltd. (“Henan Huawei”)	Mining	China	80%	80%	Ying Mining District
Henan Found Mining Co. Ltd. (“Henan Found”)	Mining	China	77.5%	77.5%
Xinshao Yunxiang Mining Co., Ltd. (“Yunxiang”)	Mining	China	70%	70%	BYP
Guangdong Found Mining Co. Ltd. (“Guangdong Found”)	Mining	China	99%	99%	GC
Infini Resources S.A. de C.V.	Mining	Mexico	43.75%	N/A	La Yesca
(i) British Virgin Islands (“BVI”)

(c) Investments in Associates

An associate is an entity over which the Company has significant influence but not control and is not a subsidiary or joint venture. Significant influence is presumed to exist where the Company has between 20% and 50% of the voting rights, but can also arise when the Company has power to be actively involved and influential in financial and operating policy decisions of the entity even though Company has less than 20% of voting rights.

The Company accounts for its investments in associates using the equity method. Under the equity method, the Company’s investment in an associate is initially recognized at cost and subsequently increased or decreased to recognize the Company’s share of profit and loss of the associate and for impairment losses after the initial recognition date. The Company’s share of an associate’s loss that are in excess of its investment are recognized only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate. The Company’s share of comprehensive income or losses attributable to shareholders of associates are recognized in comprehensive income during the period. The carrying amount of the Company’s investments in associates also include any long-term debt interests which in substance form part of the Company’s net investment. Distributions received from an associate are accounted for as a reduction in the carrying amount of the Company’s investment.

SILVERCORP METALS INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except per share and share data, unless otherwise stated)

At the end of each reporting period, the Company assesses whether there is any objective evidence that an investment in an associate is impaired. Objective evidence includes observable data indicating there is a measurable decrease in the estimated future cash flows of the associate’s operations. When there is objective evidence that an investment in an associate is impaired, the carrying amount is compared to its recoverable amount, being the higher of its fair value less cost to sell and value in use. An impairment loss is recognized if the recoverable amount is less than its carrying amount. When an impairment loss reverses in a subsequent period, the carrying amount of the investment is increased to the revised estimate of recoverable amount to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had an impairment loss not been previously recognized. Impairment losses and reversal of impairment losses, if any, are recognized in net income in the period in which the relevant circumstances are identified.

Details of the Company’s associate are as follows:


			Proportion of ownership interest held
		Country of	March 31,	March 31,
Name of associate	Principal activity	incorporation	2021	2020
New Pacific Metals Corp. (“NUAG”)	Mining	Canada	28.6%	28.8%
Whitehorse Gold Corp. (“WHG”) (Note 6(b))	Mining	Canada	27.0%	0.0%

(d)Business Combinations or asset acquisition

Optional concentration test

Effective from April 1, 2020, the Company can elect to apply an optional concentration test, on a transaction-by-transaction basis, that permits a simplified assessment of whether an acquired set of activities and assets is not a business. The concentration test is met if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. The gross assets under assessment exclude cash and cash equivalents, deferred tax assets, and goodwill resulting from the effects of deferred tax liabilities. If the concentration test is met, the set of activities and assets is determined not to be a business and no further assessment is needed.

Asset acquisitions

When the Company acquires a group of assets and liabilities that do not constitute a business, the Company identifies and recognizes the individual identifiable assets acquired and liabilities assumed by allocating the purchase price first to financial assets/financial liabilities at the respective fair values, the remaining balance of the purchase price is then allocated to the other identifiable assets and liabilities on the basis of their relative fair values at the date of purchase. Such a transaction does not give rise to goodwill or bargain purchase gain.

Business Combinations

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any non-controlling interest in the acquiree. For each business combination, the Company elects whether it measures the non-controlling interest in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition costs incurred are expensed and included in general and administrative expenses.

SILVERCORP METALS INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except per share and share data, unless otherwise stated)

When the Company acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date.

If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date through profit or loss.

(e) Foreign Currency Translation

The functional currency for each subsidiary of the Company is the currency of the primary economic environment in which the entity operates. Other than New Infini and its subsidiaries, the functional currency of the head office, Canadian subsidiaries and all intermediate holding companies is the Canadian dollar (“CAD”). The functional currency of all Chinese subsidiaries is the Chinese Renminbi (“RMB”). The functional currency of New Infini and its subsidiaries is USD.

Foreign currency monetary assets and liabilities are translated into the functional currency using exchange rates prevailing at the balance sheet date. Foreign currency non-monetary assets are translated using exchange rates prevailing at the transaction date. Foreign exchange gains and losses are included in the determination of net income.

The consolidated financial statements are presented in U.S. dollars (“USD”). The financial position and results of the Company’s entities are translated from functional currencies to USD as follows:

assets and liabilities are translated using exchange rates prevailing at the balance sheet date;
income and expenses are translated using average exchange rates prevailing during the period; and
all resulting exchange gains and losses are included in other comprehensive income.

The Company treats inter-company loan balances, which are not intended to be repaid in the foreseeable future, as part of its net investment. When a foreign entity is sold, the historical exchange differences plus the foreign exchange impact that arises on the transaction are recognized in the statement of income as part of the gain or loss on sale.

SILVERCORP METALS INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except per share and share data, unless otherwise stated)

(f) Revenue Recognition

Revenue from contracts with customers is recognized when control of the asset sold is transferred to customers and the Company satisfies its performance obligation. Revenue is allocated to each performance obligation. The Company considers the terms of the contract in determining the transfer price. The transaction price is based upon the amount the Company expects to receive in exchange for the transferring of the assets. In determining whether the Company has satisfied a performance obligation, it considers the indicators of the transfer of control, which include, but are not limited to, whether: the Company has a present right to payment; the customer has legal title to the asset; the Company has transferred physical possession of the asset to the customer; and the customer has the significant risks and rewards of ownership of the asset. This generally occurs when the assets are loaded on the trucks arranged by the customer at the Company’s milling facilities. In cases where the Company is responsible for the costs of shipping and certain other services after the date on which the control of the assets transferred to the customer, these other services are considered separate performance obligations and thus a portion of revenue earned under the contract is allocated and recognized as these performance obligations are satisfied.

Revenue from concentrate sales is typically recorded based on the Company’s assay results for the quantity and quality of concentrate sold and the applicable commodity prices, such as silver, gold, lead and zinc, set on a specific quotation period, typical ranging from ten to fifteen days around shipment date, by reference to active and freely traded commodity market. Adjustments, if any, related to the final assay results for the quantity and quality of concentrate sold are not significant and do not constrain the recognition of revenue.

Smelter charges, including refining and treatment charges, are netted against revenue from metal concentrate sales.

(g)Cash and Cash Equivalents

Cash and cash equivalents include cash on hand and held at banks and short-term money market investments that are readily convertible to cash with original terms of three months or less and exclude any restricted cash that is not available for use by the Company.

(h)Short-term Investments

Short-term investments consist of certificates of deposit and money market instruments, including cashable guaranteed investment certificates, bearer deposit notes and other financial assets with original terms of over three months but less than one year. Bonds traded on open markets are also included in short-term investments.

(i) Inventories

Inventories include concentrate inventories, direct smelting ore, stockpile ore and operating materials and supplies. The classification of inventory is determined by the stage at which the ore is in the production process. Material that does not contain a minimum quantity of metal to cover estimated processing expenses to recover the contained metal is not classified as inventory and is assigned no value.

SILVERCORP METALS INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except per share and share data, unless otherwise stated)

Direct smelting ore and stockpiled ore are sampled for metal content and are valued at the lower of mining cost and net realizable value. Mining cost includes the cost of raw material, mining contractor cost, direct labour costs, depletion and depreciation, and applicable production overheads, based on normal operating capacity. Concentrate inventories are valued at the lower of cost and net realizable value. The cost of concentrate inventories includes the mining cost for stockpiled ore milled, freight charges for shipping stockpile ore from mine sites to mill sites and milling cost. Milling cost includes cost of materials and supplies, direct labour costs, and applicable production overheads cost, based on normal operating capacity. Material and supplies are valued at the lower of cost, determined on a weighted average cost basis, and net realizable value.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sales.

(j) Plant and Equipment

Plant and equipment are initially recorded at cost, including all directly attributable costs to bring the assets to the location and condition necessary for it to be capable of operating in the manner intended by management. Plant and equipment are subsequently measured at cost less accumulated depreciation and impairment losses. Depreciation is computed on a straight-line basis based on the nature and useful lives of the assets. The significant classes of plant and equipment and their estimated useful lives are as follows:


Buildings	20 years
Office equipment	5 years
Machinery	5-10 years
Motor vehicles	5 years
Land use rights	50 years
Leasehold improvements	5 years

Subsequent costs that meet the asset recognition criteria are capitalized, while costs incurred that do not extend the economic useful life of an asset are considered repairs and maintenance, which are accounted for as an expense recognized during the period.

Assets under construction are capitalized as construction-in-progress. The cost of construction-in-progress comprises of the asset’s purchase price and any costs directly attributable to bringing it into working condition for its intended use. Construction-in-progress assets are transferred to other respective asset classes and are depreciated when they are completed and available for use.

Upon disposal or abandonment, the carrying amounts of plant and equipment are derecognized and any associated gain or loss is recognized in net income.

SILVERCORP METALS INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except per share and share data, unless otherwise stated)

(k) Mineral Rights and Properties

Mineral rights and properties include the following capitalized payments and expenditures:

Acquisition costs which consist of payments for property rights and leases, including payments to acquire or renew an exploration or mining permit, and the estimated fair value of properties acquired as part of business combination or the acquisition of a group of assets.
Exploration and evaluation costs incurred on a specific property after an acquisition of a beneficial interest or option in the property. Exploration and evaluation expenditures on properties for which the Company does not have title or rights to are expensed when incurred. Exploration and evaluation activities involve the search for mineral resources, the determination of technical feasibility and the assessment of commercial viability of an identified resource.
Development costs incurred to construct a mine and bring it into commercial production. Proceeds from sales generate during this development and pre-production stage, if any, are deducted from the costs of the asset.
Expenditures incurred on producing properties that are expected to have future economic benefit, including to extend the life of the mine and to increase production by providing access to additional reserves, such as exploration tunneling that can increase or upgrade the mineral resources, and development tunneling, including to build shafts, drifts, ramps, and access corridors that enable to access ore underground.
Borrowing costs incurred that are directly attributed to the acquisition, construction and development of a qualifying mineral property.
Estimated of environmental rehabilitation and restoration costs.

Before commencement of commercial production, mineral rights and properties are carried at costs, less any accumulated impairment charges.

Upon commencement of commercial production, mineral rights and properties are carried at costs, less accumulated depletion and any accumulated impairment charges. Mineral rights and properties, other than the payments to renew mining permits (the “mine right fee”) are depleted over the mine’s estimated life using the units of production method calculated based on proven and probable reserves. Estimation of proven and probable reserves for each property is updated when relative information is available; the result will be prospectively applied to calculate depletion amounts for future periods. If commercial production commences prior to the determination of proven and probable reserves, depletion is calculated based on the mineable portion of measured and indicated resources. The mine right fee is depleted using the units of production method based on the mineral resources which were used to determine the mine right fee payable.

SILVERCORP METALS INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except per share and share data, unless otherwise stated)

(l) Impairment and impairment reversals

At each reporting period, the Company reviews and evaluates its assets for impairment, or reversal of a previously recognized impairment, when events or changes in circumstances indicate that the related carrying amounts may not be recoverable or when there is an indication that impairment may have reversed.

When impairment indicators exist, an estimate of the recoverable amount is undertaken, being the higher of an asset’s fair value less cost of disposal (“FVLCTD”) and value in use (“VIU”). If the carrying value exceeds the recoverable amount, an impairment loss is recognized in the consolidated statement of income during the period.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessment of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. The cash flows are based on best estimates of expected future cash flows from the continued use of the asset and its eventual disposal.

FVLCTD is best evidence if obtained from an active market or binding sale agreement. Where neither exists, the fair value is based the best estimates available to reflect the amount that could be received from an arm’s length transaction. Fair value of asset is generally determined as the present value of the estimated future cash flows expected to arise from the continued use of the asset, including any expansion prospects.

Impairment is normally assessed at the level of cash-generating units (“CGU”), a CGU is identified as the smallest identifiable group of assets that generates cash inflows which are independent of the cash inflows generated from other assets.

When there is an indication that an impairment loss recognized previously may no longer exist or has decreased, the recoverable amount is calculated. If the recoverable amount exceeds the carrying amount, the carrying value of the asset is increased to the recoverable amount. The increased carrying amount cannot exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset in prior years. A reversal of an impairment loss is recognized as a gain in the consolidated statements of income in the period it is determined.

SILVERCORP METALS INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except per share and share data, unless otherwise stated)

(m) Environmental Rehabilitation Provision

The mining, extraction and processing activities of the Company normally give rise to obligations for site closure or rehabilitation. Closure and decommissioning works can include facility decommissioning and dismantling; removal or treatment of waste materials; site and land rehabilitation. The extent of work required and the associated costs are dependent on the requirements of relevant authorities and the Company’s environmental policies. Provisions for the cost of each closure and rehabilitation program are recognized at the time when environmental disturbance occurs. When the extent of disturbance increases over the life of an operation, the provision is increased accordingly. Costs included in the provision encompass all closure and decommissioning activity expected to occur progressively over the life of the operation and at the time of closure in connection with disturbances at the reporting date. Routine operating costs that may impact the ultimate closure and decommissioning activities, such as waste material handling conducted as an integral part of a mining or production process, are not included in the provision.

Costs arising from unforeseen circumstances, such as the contamination caused by unplanned discharges, are recognized as an expense and liability when the event gives rise to an obligation which is probable and capable of reliable estimation. The timing of the actual closure and decommissioning expenditure is dependent upon a number of factors such as the life and nature of the asset, the operating license conditions, and the environment in which the mine operates. Expenditure may occur before and after closure and can continue for an extended period of time dependent on closure and decommissioning requirements.

Closure and decommissioning provisions are measured at the expected amount of future cash flows, discounted to their present value for each operation. Discount rates used are specific to the underlying obligation. Significant judgments and estimates are involved in forming expectations of future activities and the amount and timing of the associated cash flows. Those expectations are formed based on existing environmental and regulatory requirements which give rise to a constructive or legal obligation.

When provisions for closure and decommissioning are initially recognized, the corresponding cost is capitalized as an asset, representing part of the cost of acquiring the future economic benefits of the operation. The capitalized cost of closure and decommissioning activities is recognized in Mineral Rights and Properties and depleted accordingly. The value of the provision is progressively increased over time as the effect of discounting unwinds, creating an expense recognized in finance costs. Closure and decommissioning provisions are also adjusted for changes in estimates. Those adjustments are accounted for as a change in the corresponding capitalized cost, except where a reduction in the provision is greater than the undepreciated capitalized cost of the related assets, in which case the capitalized cost is reduced to nil and the remaining adjustment is recognized in the income statement. In the case of closed sites, changes to estimated costs are recognized immediately in the consolidated statements of income. Changes to the capitalized cost result in an adjustment to future depreciation and finance charges.

Adjustments to the estimated amount and timing of future closure and decommissioning cash flows are a normal occurrence in light of the significant judgments and estimates involved. The provision is reviewed at the end of each reporting period for changes to obligations, legislation or discount rates that impact estimated costs or lives of operations and adjusted to reflect current best estimate.

The cost of the related asset is adjusted for changes in the provision resulting from changes in the estimated cash flows or discount rate and the adjusted cost of the asset is depreciated prospectively.

SILVERCORP METALS INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except per share and share data, unless otherwise stated)

(n)Leases

Lease Definition

At inception of a contract, the Company assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. An identified asset may be implicitly or explicitly specified in a contract, but must be physically distinct, and must not have the ability for substitution by a lessor. A lessee has the right to control an identified asset if it obtains substantially all of its economic benefits and either predetermines or directs how and for what purposes the asset is used.

Measurement of Right of Use (“ROU”) Assets and Lease Obligations

At the commencement of a lease, the Company, if acting in capacity as a lessee, recognizes an ROU asset and a lease obligation. The ROU asset is initially measured at cost, which comprises the initial amount of the lease obligation adjusted for any lease payments made at, or before, the commencement date, plus any initial direct costs incurred, less any lease incentives received.

The ROU asset is subsequently amortized on a straight-line basis over the shorter of the term of the lease, or the useful life of the asset determined on the same basis as the Company’s plant and equipment. The ROU asset is periodically adjusted for certain remeasurements of the lease obligation, and reduced by impairment losses, if any. If an ROU asset is subsequently leased to a third party (a “sublease”) and the sublease is classified as a finance lease, the carrying value of the ROU asset to the extent of the sublease is derecognized. Any difference between the ROU asset and the lease receivable arising from the sublease is recognized in profit or loss.

The lease obligation is initially measured at the present value of the lease payments remaining at the lease commencement date, discounted using the interest rate implicit in the lease or the Company’s incremental borrowing rate if the rate implicit in the lease cannot be determined. Lease payments included in the measurement of the lease obligation, when applicable, may comprise of fixed payments, variable payments that depend on an index or rate, amounts expected to be payable under a residual value guarantee and the exercise price under a purchase, extension or termination option that the Company is reasonably certain to exercise.

The lease obligation is subsequently measured at amortized cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee, or if the Company changes its assessment of whether it will exercise a purchase, extension or termination option. When the lease obligation is remeasured, a corresponding adjustment is made to the carrying amount of the ROU asset.

Measurement of Lease Receivable

At the commencement of a lease, the Company, if acting in capacity as a lessor, will classify the lease as finance lease and recognize a lease receivable at an amount equal to the net investment in the lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset or if the lease is a sublease, by reference to the ROU asset arising from the original lease (the “head lease”). A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership of an underlying asset or the lease is a short-term lease. Cash received from an operating lease is included in other income in the Company’s consolidated statement of income on a straight-line basis over the period the lease.

SILVERCORP METALS INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except per share and share data, unless otherwise stated)

The lease receivable is initially measure at the present value of the lease payments remaining at the lease commencement date, discounted at the interest rate implicit in the lease or the Company’s incremental borrowing rate if the sublease is a finance lease. The lease receivable is subsequently measured at amortized cost using the effective interest rate method, and reduced by the amount received and impairment losses, if any.

Recognition Exemptions

The Company has elected not to recognize the ROU asset and lease obligations for short-term leases that have a lease term of 12 months or less or for leases of low-value assets. Payments associated with these leases are recognized as general and administrative expense on a straight-line basis over the lease term on the consolidated statement of income.

(o)Borrowing Costs

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset, which necessarily takes a substantial period of time to get ready for its intended use or sale, are capitalized as part of the cost of that asset. All other borrowing costs are expensed in the period in which they are incurred. No borrowing costs were capitalized in the periods presented.

(p) Share-based Payments

The Company makes share-based awards, including restricted share units (“RSUs”), performance share units (“PSUs”), and stock options, to employees, officers, directors, and consultants.

For equity-settled awards, the fair value is charged to the consolidated statements of income and credited to equity, on a straight-line basis over the vesting period, after adjusting for the estimated number of awards that are expected to vest. The fair value of share units is determined based on quoted market price of our common shares at the date of grant. The fair value of the stock options granted to employees, officers, and directors is determined at the date of grant using the Black-Scholes option pricing model with market related input. The fair value of stock options granted to consultants is measured at the fair value of the services delivered unless that fair value cannot be estimated reliably, which then is determined using the Black-Scholes option pricing model. Stock options with graded vesting schedules are accounted for as separate grants with different vesting periods and fair values.

At each statement of financial position date prior to vesting, the cumulative expense representing the extent to which the vesting period has expired and management’s best estimate of the awards that are ultimately expected to vest is computed (after adjusting for non-market performance conditions). The movement in cumulative expense is recognized in the consolidated statements of income with a corresponding entry within equity. No expense is recognized for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition, which are treated as vested irrespective of whether or not the market condition is satisfied, provided that all other performance conditions are satisfied.

SILVERCORP METALS INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except per share and share data, unless otherwise stated)

(q)Income Taxes

Current tax for each taxable entity is based on the local taxable income at the local statutory tax rate enacted or substantively enacted at the balance sheet date and includes adjustments to tax payable or recoverable in respect to previous periods.

Current tax assets and current tax liabilities are only offset if a legally enforceable right exists to set off the amounts, and the Company intends to settle on a net basis, or to realize the asset and settle the liability simultaneously.

Deferred tax is recognized using the balance sheet liability method on temporary differences at the reporting date between the tax bases of assets and liabilities, and their carrying amounts for financial reporting purposes. Deferred tax assets are recognized for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses, can be utilized, except:

where the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred income tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.

The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized. Unrecognized deferred income tax assets are reassessed at the end of each reporting period and are recognized to the extent that it has become probable that future taxable profit will be available to allow the deferred tax asset to be recovered.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Deferred income tax relating to items recognized outside profit or loss is recognized in other comprehensive income or directly in equity.

Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority.

SILVERCORP METALS INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except per share and share data, unless otherwise stated)

(r) Earnings per Share

Earnings per share are computed by dividing net income available to equity holders of the Company by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution that could occur if additional common shares are assumed to be issued under securities that entitle their holders to obtain common shares in the future. For stock options and warrants, the number of additional shares for inclusion in diluted earnings per share calculations is determined by the options and warrants, whose exercise price is less than the average market price of the Company’s common shares, are assumed to be exercised and the proceeds are used to repurchase common shares at the average market price for the period. The incremental number of common shares issued under stock options, and repurchased from proceeds, is included in the calculation of diluted earnings per share.

(s) Financial Instruments

Initial recognition:

On initial recognition, all financial assets and financial liabilities are recorded at fair value adjusted for directly attributable transaction costs except for financial assets and liabilities classified as fair value through profit or loss (“FVTPL”), in which case transaction costs are expensed as incurred.

Subsequent measurement of financial assets:

Subsequent measurement of financial assets depends on the classification of such assets.

I.	Non-equity instruments:
	IFRS 9 includes a single model that has only two classification categories for financial instruments other than equity instruments: amortized cost and fair value. To qualify for amortized cost accounting, the instrument must meet two criteria:

	i.	The objective of the business model is to hold the financial asset for the collection of the contractual cash flows; and
	ii.	All contractual cash flows represent only principal and interest on that principal.

All other instruments are mandatorily measured at fair value.

II.	Equity instruments:
	At initial recognition, for equity instruments other than held for trading, the Company may make an irrevocable election to designate them, on instrument by instrument basis, as either FVTPL or fair value through other comprehensive income (“FVTOCI”).

Financial assets classified as amortized cost are measured at the amount of initial recognition minus principal repayments, plus the cumulative amortization using the effective interest method of any difference between that initial amount and the maturity amount, adjusted for any impairment loss allowance. Amortization or interest income from the effective interest method is included in finance income.

Financial assets classified as FVTPL are measured at fair value with changes in fair values recognized in profit or loss. Equity investments designated as FVTOCI are measured at fair value with changes in fair values recognized in other comprehensive income (“OCI”). Dividends from that investment are recorded in profit or loss when the Company’s right to receive payment of the dividend is established unless they represent a recovery of part of the cost of the investment.

SILVERCORP METALS INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except per share and share data, unless otherwise stated)

Impairment of financial assets carried at amortized cost:

The Company recognizes a loss allowance for expected credit losses on its financial assets carried at amortized cost. The amount of expected credit losses is updated at each reporting period to reflect changes in credit risk since initial recognition of the respective financial instruments.

Subsequent measurement of financial liabilities:

Financial liabilities classified as amortized cost are measured at the amount of initial recognition minus principal repayments, plus the cumulative amortization using the effective interest method of any difference between that initial amount and the maturity amount. Amortization or interest expense using the effective interest method is included in finance costs.

Financial liabilities classified as FVTPL are measured at fair value with gains and losses recognized in profit or loss.

The Company classifies its financial instruments as follows:

Financial assets classified as FVTPL: cash and cash equivalents, short-term investments - money market instruments, and other investments - equity investments designated as FVTPL and warrants;
Financial assets classified as FVTOCI: other investments - equity investments designated as FVTOCI;
Financial assets classified as amortized cost: short-term investments - bonds, trade and other receivables and due from related parties;
Financial liabilities classified as amortized cost: accounts payable and accrued liabilities, dividends payable, bank loan, customer deposits and due to related parties.

Derecognition of financial assets and financial liabilities:

A financial asset is derecognized when:

The rights to receive cash flows from the asset have expired; or
The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

Gains and losses on derecognition of financial assets and liabilities classified as amortized cost are recognized in profit or loss when the instrument is derecognized or impaired, as well as through the amortization process.

Gains and losses on derecognition of equity investments designated as FVTOCI (including any related foreign exchange component) are recognized in OCI. Amounts presented in OCI are not subsequently transferred to profit or loss.

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another liability from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability. In this case, a new liability is recognized, and the difference in the respective carrying amounts is recognized in the statement of income.

SILVERCORP METALS INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except per share and share data, unless otherwise stated)

Offsetting of financial instruments:

Financial assets and liabilities are offset and the net amount is reported in the consolidated statement of financial position if and only if, there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle liabilities simultaneously.

Fair value of financial instruments:

The fair value of financial instruments that are traded in active markets at each reporting date is determined by reference to quoted market prices, without deduction for transaction costs. For financial instruments that are not traded in active markets, the fair value is determined using appropriate valuation techniques, such as using a recent arm’s length market transaction between knowledgeable and willing parties, discounted cash flow analysis, reference to the current fair value of another instrument that is substantially the same, or other valuation models.

(t) Government Assistance

Refundable mining exploration tax credits received from eligible mining exploration expenditures and other government grants received for project construction and development reduce the carrying amount of the related mineral rights and properties or plant and equipment assets. The depletion or depreciation of the related mineral rights and properties or plant and equipment assets is calculated based on the net amount.

Government subsidies as compensation for expenses already incurred are recognized in profit and loss during the period in which it becomes receivable.

(u) Significant Accounting Judgments and Estimates

The preparation of consolidated financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions about future events that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Although these judgments and estimates are continuously evaluated and are based on management’s experience and best knowledge of relevant facts and circumstances, actual results may differ from these estimates.

Areas where critical accounting judgments have the most significant effect on the consolidated financial statements include:

Capitalization of expenditures included in mineral rights and properties - management has determined that those capitalized expenditures, including exploration and evaluation expenditures and development costs incurred at producing properties, have potential future economic benefits and are potentially economically recoverable, subject to impairment analysis. Management uses several criteria in its assessments of economic recoverability and probability of future economic benefit, including geologic and metallurgic information, history of conversion of mineral deposits to proven and probable reserves, scoping and feasibility studies, accessible facilities, existing permits, whether to extend of the mine life, increase future production, or to provide access to a component of an ore body that will be mined in a future period.

SILVERCORP METALS INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except per share and share data, unless otherwise stated)

Indicators of Impairment and impairment reversal - Management applies significant judgement in assessing whether indicators of impairment or reserve impairment exist for an asset or group of assets which would necessitate impairment testing. Internal and external factors such as significant changes in the use of the asset, commodity prices, and interest rates are used in determining whether there are indicators.

Income taxes - Deferred tax assets and liabilities are determined based on difference between the financial statements carrying values of assets and liabilities and their respective income tax based and loss carried forward. Withholding tax are determined based on the earnings of foreign subsidiary distributed to the Company.

The recognition of deferred tax assets and the determination of the ability of the Company to utilize tax loss carry-forwards to offset deferred tax liabilities requires management to exercise judgement and make certain assumptions about the future performance of the Company. Management is required to access whether it is “probable” that the Company will benefit from these prior losses and other deferred tax assets. Changes in economic conditions, metal prices, and other factors could result in revision to the estimates of the benefits to be realized or the timing of utilization of the losses.

Functional currency - The determination of an entity’s functional currency often requires significant judgement where the primary economic environment in which the entity operates may not be clear. This can have a significant impact on the consolidated results based the foreign currency translation method of the Company.

Contingencies - Contingencies can be either possible assets or liabilities arising from past events which, by their nature, will only be resolved when one or more future events not wholly within our control occur or fail to occur. The assessment of such contingencies inherently involves the exercise of significant judgment and estimates of the outcome of future events. In assessing loss contingencies related to legal, tax or regulatory proceedings that are pending against us or unasserted claims, that may result in such proceedings or regulatory or government actions that may negatively impact our business or operations, we evaluate with our legal counsel the perceived merits of any legal, tax or regulatory proceedings, unasserted claims or actions. Also evaluated are the perceived merits of the nature and amount of relief sought or expected to be sought, when determining the amount, if any, to recognize as a contingent liability or assessing the impact on the carrying value of assets. Contingent assets or liabilities are not recognized in the consolidated financial statements.

Consolidation of entities in which the Group holds less than a majority of voting rights - As at March 31, 2021, the Company owned 43.75% interest in New Infini (Note 3) and has evaluated and concluded that the Company has control over New Infini due to New Infini’s share structure, board composition and other related facts. Accordingly consolidates New Infini’s results from the date of acquisition.

Areas where critical accounting estimates have the most significant effect on the amounts recognized in the consolidated financial statements include:

SILVERCORP METALS INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except per share and share data, unless otherwise stated)

Mineral Reserves and Mineral Resources estimates - Mineral reserves and mineral resources are estimated by qualified persons in accordance with National Instrument 43-101, “Standards of Disclosure form Mineral Projects”, issued by the Canadian Securities Administrators. There are numerous uncertainties inherent in estimating mineral reserves and mineral resources, including many factors beyond the Company’s control. Such estimation is a subjective process, and the accuracy of any mineral reserve or mineral resource estimate is a function of the quantity and quality of available data and of the assumptions made and judgements used in engineering and geological interpretation. Changes in assumptions, including metal prices, production costs, recovery rate, and market conditions could result in mineral reserve and mineral resource estimate revision. Such change could impact depreciation and amortization rates, asset carrying value and the environmental and rehabilitation provision.

Impairment and reserve impairment of assets - Where an indicator of impairment and reserves impairment exists, a formal estimate of the recoverable amount is made, which is determined as the higher of FVLCTD and VIU.

The determination of FVLCTD and VIU requires management to make estimates and assumptions about expected production based on current estimates of recoverable metal, commodity prices, operating costs, taxes and export duties, inflation and foreign exchange, salvage value, future capital expenditures and discount rates. The estimates and assumptions are subject to risk and uncertainty; hence, there is the possibility that changes in circumstances will alter these projections, which may impact the recoverable amount of the assets. In such circumstances, some or all of the carrying value of the assets may be further impaired or the impairment charge reversed with the impact recorded in the consolidated statements of (loss) income.

Valuation of inventory - Stockpiled ore, direct smelting ore, and concentrate inventories are valued at the lower of average cost and net realizable value. Net realizable value is calculated as the estimated price at the time of sale based on prevailing and forecast metal prices less estimated future production costs to convert the inventory into saleable form and associated selling costs. The determination of forecast sales price, recovery rates, grade, assumed contained metal in stockpiles and production and selling costs requires significant assumptions that may impact the stated value of our inventory and lead to changes in NRV. In determining the value of material and supplies inventory, we make estimates of the amounts to be used and realizable value through disposals or sales. Changes in these estimates can result in a change in carrying amounts of inventory, as well as cost of sales.

Environmental rehabilitation provision and the timing of expenditures - Environmental rehabilitation costs are a consequence of exploration activities and mining. The cost estimates are updated annually during the life of a mine to reflect known developments, (e.g. revisions to cost estimates and to the estimated lives of operations), and are subject to review at regular intervals. Decommissioning, restoration and similar liabilities are estimated bases on the Company’s interpretation of current regulatory requirements, constructive obligations and are measured at the best estimates of expenditures required to settle the present obligation of decommissioning, restoration or similar liabilities that may occur over the life of the mine. The carrying amount is determined based on the net present value of estimated future cash expenditures for the settlement of decommissioning, restoration or similar liabilities that may occur over the life of the mine. Such estimates are subject to change based on change in laws and regulations and negotiations with regulatory authorities.

SILVERCORP METALS INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except per share and share data, unless otherwise stated)


3.	LA YESCA ACQUISITION

On December 17, 2020 the Company and its subsidiary New Infini entered into a framework agreement (the “Agreement”) with various arm’s length vendors (the “Vendors”), whereby New Infini agreed to acquire 100% interest in the La Yesca Silver Project (“La Yesca”) through indirect purchase of all of the issued and outstanding shares of Infini Resources, S.A. de C.V., a Mexican company which owns La Yesca. La Yesca is a silver-polymetallic, epithermal-type project located approximately 100 kilometres (“km”) (185 km by road) northwest of Guadalajara, the second-largest city in Mexico. The concessions comprising La Yesca cover an area of approximately 47.7 km². In total, 7,649 metres from 25 drill holes have previously been completed, all of which intersected mineralization.

The purchase consideration and payment terms for the acquisition of La Yesca are summarized as follows:

Upon closing of the Agreement, a $8,250 cash payment (the “Initial Cash Payment”) and the transfer of a 45% interest in the issued and outstanding shares of New Infini (the “New Infini Shares”) to the Vendors;
Within 90 days of closing of the Agreement, a cash payment of $1,000, less any liabilities contemplated under the Agreement (together with the Initial Cash Payment, the “Cash Consideration”); and
A “Discovery payment” of up to $30,000 calculated on the basis of $0.20 per ounce of Ag resources as defined by National Instrument 43-101 Standards of Disclosure for Mineral Projects paid by New Infini to the Vendors subject to certain permitting considerations.

The Company paid $7,568 of the Cash Consideration through a capital injection to New Infini to hold 45% of the issued and outstanding New Infini Shares. A group of the Company’s directors, officers, employees and consultants paid $1,682 of the Cash Consideration collectively to hold 10% of the issued and outstanding New Infini Shares. The transaction has been accounted for as an acquisition of assets as the purchase price was concentrated on a single asset, the La Yesca mineral property interest. The purchase consideration was allocated to the assets acquired based on their relative fair values at the date of the acquisition, net of any associated liabilities.

On January 14, 2021, the Company participated in a private placement of New Infini Shares and purchased an additional 3,000,000 New Infini Shares for $1,500. As at March 31, 2021, the Company owned 21,000,000 New Infini Shares, representing a 43.75% interest in New Infini.

SILVERCORP METALS INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except per share and share data, unless otherwise stated)


4.	SHORT-TERM INVESTMENTS

As at March 31, 2021, short-term investments consist of the following:


		Amount	Interest rates	Maturity
Bonds	$	15,812	5.38% - 13.00%	January 10, 2022 - September 3, 2024
Money market instruments		64,545
	$	80,357

As at March 31, 2020, short-term investments consist of the following:


		Amount	Interest rates	Maturity
Bonds	$	23,313	6.00% - 13.00%	April 2, 2020 - June 27, 2024
Money market instruments		53,429
	$	76,742

All bonds were purchased on open markets and are readily tradable.


5.	INVENTORIES

Inventories consist of the following:


		March 31, 2021		March 31, 2020
Direct smelting ore and stockpile ore	$	1,916	$	1,138
Concentrate inventory		4,536		4,368
Total stockpile and concentrate		6,452		5,506
Material and supplies		3,316		2,924
	$	9,768	$	8,430

The amount of inventories recognized as expense during the year ended March 31, 2021 was $90,978 (year ended March 31, 2020 - $82,744).


6.	INVESTMENT IN ASSOCIATES

(a) Investment in New Pacific Metals Corp.

New Pacific Metals Corp. (“NUAG”) is a Canadian public company listed on the TSX Exchange (symbol: NUAG). NUAG is a related party of the Company by way of two common directors and one officer, and the Company accounts for its investment in NUAG using the equity method as it is able to exercise significant influence over the financial and operating policies of NUAG.

On June 9, 2020, the Company participated in an underwritten offering of common shares of NUAG and acquired an additional 1,320,710 common shares of NUAG for a cost of $5,805.

SILVERCORP METALS INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except per share and share data, unless otherwise stated)

On July 22 2020, NUAG announced the spin-out by way of a plan of arrangement (the “Arrangement”) of its then wholly-owned subsidiary, Whitehorse Gold Corp. (“WHG”), which owns 100% Skukum Gold Project (formerly “Tagish Lake Gold Project”) located in Yukon, Canada. Upon completion of the Arrangement on November 18, 2020, NUAG and WHG became two separate entities, and NUAG distributed all of the WHG common shares held by NUAG to its shareholders on a pro rata basis. WHG common shares were listed on the TSX Venture Exchange.

As at March 31, 2021, the Company owned 43,917,216 common shares of NUAG (March 31, 2020 -42,596,506), representing an ownership interest of 28.6% (March 31, 2020 - 28.8%). The summary of the investment in NUAG common shares and its market value as at the respective balance sheet dates are as follows:


						Value of NUAG’s
	Number of					common shares per
	shares		Amount			quoted market price
Balance April 1, 2019	39,346,300	$	38,703		$	69,783
Purchase from open market	502,600		861
Exercise of warrants	1,500,000		2,349
Participation in public offering	1,247,606		3,820
Share of net loss			(1,276	)
Share of other comprehensive income			1,077
Dilution gain			723
Disposal of common shares held by the associate			1,127
Foreign exchange impact			(2,829	)
Balance March 31, 2020	42,596,506	$	44,555		$	148,624
Participation in public offering	1,320,710		5,805
WHG Spin-out			(1,793	)
Share of net loss			(1,672	)
Share of other comprehensive loss			(2,324	)
Foreign exchange impact			5,828
Balance March 31, 2021	43,917,216	$	50,399		$	181,257

SILVERCORP METALS INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except per share and share data, unless otherwise stated)

Summarized financial information for the Company’s investment in NUAG on a 100% basis is as follows:


		Years ended March 31,
		2021	⁽¹⁾		2020	⁽¹⁾
Income from investments	$	1,278		$	494
General and administrative expense		(5,836	)		(3,824	)
Gain on disposal of PPE		(2	)		-
Foreign exchange gain		(1,281	)		669
Impairment reversal		8,862			(586	)
Net loss of associate	$	3,021		$	(3,247	)
Adjustments to net loss of associate		(8,862	)		(1,170	)
Net loss of associate qualified for pick-up	$	(5,841	)	$	(4,417	)
Company’s share of net loss	$	(1,672	)	$	(1,276	)

⁽¹⁾NUAG’s fiscal year-end is on June 30. NUAG’s quarterly financial results were used to compile the financial information that matched with the Company’s year-end on March 31.


	As at March 31, 2021		As at March 31, 2020
Current assets	$	48,511	$	29,012
Non-current assets		78,164		74,989
Total assets	$	126,675	$	104,001
Current liabilities		811		1,409
Total liabilities		811		1,409
Net assets	$	125,864	$	102,592
Company’s share of net assets of associate	$	35,932	$	29,575

(b) Investment in Whitehorse Gold Corp.

WHG is a Canadian public company listed on the TSX Venture Exchange (symbol: WHG). The Company accounts for its investment in WHG using the equity method as it is able to exercise significant influence over the financial and operating policies of WHG.

On November 18, 2020, the Company received 5,740,285 WHG common shares distributed by NUAG to the Company under the Arrangement. In connection with the Arrangement, WHG conducted a non-brokered private placement financing. The Company participated in WHG’s private placement and acquired an additional 5,774,000 common shares of WHG for a cost of $1,326.

SILVERCORP METALS INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except per share and share data, unless otherwise stated)

As at March 31, 2021, the Company owned 11,514,285 common shares of WHG (March 31, 2020 - nil), representing an ownership interest of 26.99% (March 31, 2020 - nil). The summary of the investment in WHG common shares and its market value as at the respective balance sheet dates are as follows:


						Value of WHG’s
	Number of					common shares per
	shares		Amount			quoted market price
Balance April 1, 2020
Distributed under WHG spin-out	5,740,285		1,793
Participation in private placement	5,774,000		1,326
Share of other net loss			(174	)
Foreign exchange impact			113
Balance March 31, 2021	11,514,285	$	3,058		$	15,108

Summarized financial information for the Company’s investment in WHG on a 100% basis is as follows:


		Year ended March 31,2021 ⁽¹⁾
General and administrative expense	$	(825	)
Other expense		(31	)
Net loss of associate	$	(856	)
Adjustments to net loss of associate		211
Net loss of associate qualified for pick-up	$	(645	)
Company’s share of net loss	$	(174	)

⁽¹⁾WHG’s fiscal year-end is on December 31. WHG’s quarterly financial results were used to compile the financial information that matched with the Company’s year-end on March 31.


		As at March 31, 2021
Current assets	$	823
Non-current assets		10,862
Total assets	$	11,685
Current liabilities		237
Total liabilities		237
Net assets	$	11,448
Company’s share of net assets of associate	$	3,090

Subsequent to March 31, 2021, the Company participated in a brokered private placement of Whitehorse Gold and purchased 4,000,000 units at the cost of $4,960. Each unit consisted of one Whitehorse common share and one common share purchase warrant with exercise price of CAD$2 which expires on May 14, 2026.

SILVERCORP METALS INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except per share and share data, unless otherwise stated)


7.	OTHER INVESTMENTS


		March 31, 2021		March 31, 2020
Equity investments designated as FVTOCI
Public companies	$	2,966	$	6,633
Private companies		2,289		2,117
		5,255		8,750
Equity investments designated as FVTPL
Public companies		10,478		-
Total	$	15,733	$	8,750

Investments in publicly traded companies represent equity interests of other publicly-trading mining companies that the Company has acquired through the open market or through private placements. Investment in equity instruments that are held for trading are classified as FVTPL. For other investment in equity instruments, the Company can make an irrevocable election, on an instrument-by-instrument basis, to designate them as FVTPL or FVTOCI.

The continuity of such investments is as follows:


					Accumulated fair			Accumulated fair
					value change			value change
		Fair Value			included in OCI			included in P&L
April 1, 2019	$	9,253		$	(35,128	)	$	-
Gain on equity investments		249			249			-
Acquisition		7,851			-			-
Disposal		(8,454	)		-			-
Impact of foreign currency translation		(149	)		-			-
March 31, 2020	$	8,750		$	(34,879	)	$	-
Gain on equity investments designated as FVTOCI		12,069			12,069			-
Gain on equity investments designated as FVTPL		7,188			-			7,188
Acquisition		12,708			-			-
Disposal		(19,301	)		-			-
Reclassified to short-term investments		(7,511	)		-			-
Impact of foreign currency translation		1,830			-			-
March 31, 2021	$	15,733		$	(22,810	)	$	7,188

On April 26, 2020, the Company entered into a definitive agreement with Guyana Goldfields Inc. (“Guyana Goldfields”), and subsequently amended on May 16, 2020 (collectively, the “Arrangement Agreement”) to acquire all of the issued and outstanding shares of Guyana Goldfields. On June 10, 2020, Guyana Goldfield terminated the Arrangement Agreement and paid the Company a break fee of $6,497 (CAD$9,000). The gain was recorded as a recovery of property evaluation and business development expense on the consolidated statements of income to net off related expenditure and cost. The fair value of the shares of Guyana Goldfields was reclassified to short-term investments from other investments during the year. All shares of Guyana Goldfields held by the Company were disposed during the year, and a gain of $15,430 was realized.

SILVERCORP METALS INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except per share and share data, unless otherwise stated)


8.	PLANT AND EQUIPMENT

Plant and equipment consist of:


	Land use rights				Office						Motor			Construction
Cost	and building				equipment			Machinery			vehicles			in progress			Total
Balance as at April 1, 2019	$	100,028		$	7,735		$	29,452		$	6,722		$	5,790		$	149,727
Adjustment upon adoption of IFRS 16		360			-			-			-			-			360
Additions		1,736			1,060			1,082			681			3,618			8,177
Disposals		(6,932	)		(368	)		(3,265	)		(630	)		(52	)		(11,247	)
Reclassification of asset groups⁽¹⁾		6,908			-			65			-			(6,973	)		-
Impact of foreign currency translation		(5,646	)		(417	)		(1,534	)		(357	)		(247	)		(8,201	)
Balance as at March 31, 2020	$	96,454		$	8,010		$	25,800		$	6,416		$	2,136		$	138,816
Additions		182			864			1,117			1,059			7,189			10,411
Disposals		(205	)		(250	)		(291	)		(480	)		-			(1,226	)
Reclassification of asset groups⁽¹⁾		5,579			325			2,221			-			(8,125	)		-
Impact of foreign currency translation		8,141			711			2,227			542			142			11,763
Ending balance as at March 31, 2021	$	110,151		$	9,660		$	31,074		$	7,537		$	1,342		$	159,764
Impairment, accumulated depreciation and amortization
Balance as at April 1, 2019	$	(49,929	)	$	(5,409	)	$	(20,701	)	$	(5,017	)	$	(54	)	$	(81,110	)
Disposals		6,821			278			3,051			574			52			10,776
Depreciation and amortization		(3,481	)		(527	)		(1,601	)		(384	)		-			(5,993	)
Impact of foreign currency translation		2,602			283			1,083			263			2			4,233
Balance as at March 31, 2020	$	(43,987	)	$	(5,375	)	$	(18,168	)	$	(4,564	)	$	-		$	(72,094	)
Disposals		90			228			176			388			-			882
Depreciation and amortization		(3,921	)		(630	)		(1,629	)		(496	)		-			(6,676	)
Impact of foreign currency translation		(3,752	)		(469	)		(1,550	)		(376	)		-			(6,147	)
Ending balance as at March 31, 2021	$	(51,570	)	$	(6,246	)	$	(21,171	)	$	(5,048	)	$	-		$	(84,035	)
Carrying amounts
Balance as at March 31, 2020	$	52,467		$	2,635		$	7,632		$	1,852		$	2,136		$	66,722
Ending balance as at March 31, 2021	$	58,581		$	3,414		$	9,903		$	2,489		$	1,342		$	75,729

⁽¹⁾When an asset is available for use, it is reclassified from construction in progress to one of the appropriate plant and equipment categories.


Carrying amounts as at March 31, 2021		Ying Mining District		BYP		GC		Other		Total
Land use rights and building	$	41,177	$	3,047	$	12,369	$	1,988	$	58,581
Office equipment		2,647		20		448		299		3,414
Machinery		7,114		213		2,576		-		9,903
Motor vehicles		1,917		20		359		193		2,489
Construction in progress		796		533		13		-		1,342
Total	$	53,651	$	3,833	$	15,765	$	2,480	$	75,729
Carrying amounts as at March 31, 2020		Ying Mining District		BYP		GC		Other		Total
Land use rights and building	$	35,476	$	3,094	$	11,762	$	2,135	$	52,467
Office equipment		1,886		26		403		320		2,635
Machinery		5,734		258		1,640		-		7,632
Motor vehicles		1,598		22		232		-		1,852
Construction in progress		419		493		1,224		-		2,136
Total	$	45,113	$	3,893	$	15,261	$	2,455	$	66,722

During the year ended March 31, 2021, certain plant and equipment were disposed for proceeds of $51 (year ended March 31, 2020 - $10) and loss of $293 (year ended March 31, 2020 - loss of $461).

SILVERCORP METALS INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except per share and share data, unless otherwise stated)


9.	MINERAL RIGHTS AND PROPERTIES

Mineral rights and properties consist of:


		Producing and development properties									Exploration and evaluation properties
Cost		Ying Mining District			BYP			GC			XHP			RZY			La Yesca		Total
Balance as at April 1, 2019	$	288,453		$	64,305		$	107,161		$	20,909		$	174		$	-	$	481,002
Capitalized expenditures		23,871			6			1,617			-			-			-		25,494
Mine right fees		797			-			-			-			-			-		797
Environmental rehabiliation		(4,299	)		39			239			-			-			-		(4,021	)
Disposition		-			-			-			(20,485	)		-			-		(20,485	)
Foreign currecy translation impact		(15,686	)		(778	)		(5,706	)		(424	)		(10	)		-		(22,604	)
Balance as at March 31, 2020	$	293,136		$	63,572		$	103,311		$	-		$	164		$	-	$	460,183
Capitalized expenditures		31,138			30			3,890			-			-			87		35,145
Acquisition (Note 3)		-			-			-			-			-			16,660		16,660
Environmental rehabiliation		(1,268	)		(135	)		(207	)		-			-			-		(1,610	)
Foreign currecy translation impact		24,994			1,142			8,616			-			21			-		34,773
Ending balance as at March 31, 2021	$	348,000		$	64,609		$	115,610		$	-		$	185		$	16,747	$	545,151
Impairment and accumulated depletion
Balance as at April 1, 2019	$	(91,179	)	$	(57,083	)	$	(80,491	)	$	(13,155	)	$	(174	)	$	-	$	(242,082	)
Depletion		(14,282	)		-			(2,165	)		-			-			-		(16,447	)
Disposition		-			-			-			12,888			-			-		12,888
Foreign currecy translation impact		5,071			395			4,301			267			10			-		10,044
Balance as at March 31, 2020	$	(100,390	)	$	(56,688	)	$	(78,355	)	$	-		$	(164	)	$	-	$	(235,597	)
Depletion		(13,921	)		-			(2,419	)		-			-			-		(16,340	)
Foreign currecy translation impact		(8,666	)		(576	)		(6,522	)		-			(21	)		-		(15,785	)
Ending balance as at March 31, 2021	$	(122,977	)	$	(57,264	)	$	(87,296	)	$	-		$	(185	)	$	-	$	(267,722	)
Carrying amounts
Balance as at March 31, 2020	$	192,746		$	6,884		$	24,956		$	-		$	-		$	-	$	224,586
Ending balance as at March 31, 2021	$	225,023		$	7,345		$	28,314		$	-		$	-		$	16,747	$	277,429


10.	LEASES

The following table summarizes changes in the Company’s lease receivable and lease obligation related to the Company’s office lease and associated sublease.


		Lease Receivable			Lease Obligation
Adjustment upon adoption of IFRS 16, April 1, 2019	$	447		$	1,463
Addition		238			1,239
Interest accrual		27			112
Interest received or paid		(27	)		(112	)
Principal repayment		(118	)		(503	)
Foreign exchange impact		(33	)		(130	)
Balance, March 31, 2020	$	534		$	2,069
Interest accrual		24			95
Interest received or paid		(24	)		(95	)
Principal repayment		(196	)		(563	)
Foreign exchange impact		58			235
Balance, March 31, 2021	$	396		$	1,741
Less: current portion		(213	)		(657	)
Non-current portion	$	183		$	1,084

SILVERCORP METALS INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except per share and share data, unless otherwise stated)

The following table presents a reconciliation of the Company’s undiscounted cash flows to their present value for its lease receivable and lease obligation:


		Lease Receivable			Lease Obligation
Within 1 year	$	231		$	692
Between 2 to 5 years		183			1,188
Total undiscounted amount		414			1,880
Less future interest		(18	)		(139	)
Total discounted amount	$	396		$	1,741
Less: current portion		(213	)		(657	)
Non-current portion	$	183		$	1,084

The lease receivable and lease obligation were discounted using an estimated incremental borrowing rate of 5%.


11.	ENVIRONMENTAL REHABILITATION

The following table presents the reconciliation of the beginning and ending obligations associated with the retirement of the properties:


		Total
Balance, April 1, 2019	$	13,688
Reclamation expenditures		(385	)
Unwinding of discount of environmental rehabilitation		422
Revision of provision		(4,021	)
Derecognition upon disposal of SX Gold		(289	)
Foreign exchange impact		(715	)
Balance, March 31, 2020	$	8,700
Reclamation expenditures		(189	)
Unwinding of discount of environmental rehabilitation		251
Revision of provision		(1,610	)
Foreign exchange impact		711
Balance, March 31, 2021	$	7,863

As at March 31, 2021, the total undiscounted amount of estimated cash flows required to settle the Company’s environmental rehabilitation provision was $10,549 (March 31, 2020 - $11,408) over the next twenty-five years, which has been discounted using an average discount rate of 3.39% (March 31, 2020 -2.75%).

During the year ended March 31, 2021, the Company incurred actual reclamation expenditures of $189 (year ended March 31, 2020 - $385), paid reclamation deposit of $460 (year ended March 31, 2020 -$1,727) and received reclamation deposit refund of $1,855 (year ended March 31, 2020 - $nil).

SILVERCORP METALS INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except per share and share data, unless otherwise stated)


12.	SHARE CAPITAL

(a) Authorized

Unlimited number of common shares without par value. All shares issued as at March 31, 2021 and 2020 were fully paid.

(b) Share-based compensation

The Company has a share-based compensation plan (the “Plan”) which consists of stock options, restricted share units (the “RSUs”) and performance share units (the “PSUs”). The Plan allows for the maximum number of common shares to be reserved for issuance on any share-based compensation to be a rolling 10% of the issued and outstanding common shares from time to time. Furthermore, no more than 3% of the reserve may be granted in the form of RSUs and PSUs.

For the year ended March 31, 2021, a total of $4,307 (year ended March 31, 2020 - $2,669) in share-based compensation expense was recognized and included in the general and administrative and exploration and business development expenses on the consolidated statements of income.

(i) Stock options

The following is a summary of option transactions:


				Weighted average
				exercise price per
	Number of shares			share CAD$
Balance, April 1, 2019	6,480,916		$	2.86
Options exercised	(3,833,406	)		2.78
Options forfeited	(123,750	)		3.29
Options expired	(100,000	)		1.75
Balance, March 31, 2020	2,423,760		$	3.00
Option granted	1,127,000			7.25
Options exercised	(1,553,338	)		3.02
Options forfeited	(135,004	)		4.52
Balance, March 31, 2021	1,862,418		$	5.45

During the year ended March 31, 2021, a total of 1,127,000 options with a life of five years were granted to directors, officers, and employees at an exercise price of CAD$5.46 to $9.45 per share subject to a vesting schedule over a three-year term with 1/6 of the options vesting every six months after the date of grant until fully vested.

SILVERCORP METALS INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except per share and share data, unless otherwise stated)

The fair value of stock options granted during year ended March 31, 2021 were calculated as of the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions:


	Year ended March 31,
	2021
Risk free interest rate	0.31%
Expected life of option in years	2.75 years
Expected volatility	67%
Expected dividend yield	0.51%
Estimated forfeiture rate	9.87%
Weighted average share price at date of grant	$7.25 CAD

The weighted average grant date fair value of options granted during the year ended March 31, 2021 was CAD$2.93 (US$2.33). Volatility was determined based on the historical volatility of the Company’s shares over the estimated life of stock options.

The following table summarizes information about stock options outstanding at March 31, 2021:


					Weighted
	Number of options		Weighted average	Number of options	average
	outstanding at	Weighted average remaining	exercise price in	exercisable at	exercise price
Exercise price in CAD$	March 31, 2021	contractual life (Years)	CAD$	March 31, 2021	in CAD$
$2.60	430,000	0.63	$2.60	430,000	$2.60
$3.40	363,750	0.40	$3.40	363,750	$3.40
$5.46	578,668	4.15	$5.46	89,505	$5.46
$9.45	490,000	4.62	$9.45	-	-
$2.60 to $9.45	1,862,418	2.73	$5.45	883,255	$3.22

Subsequent to March 31, 2021, a total of 106,250 options with exercise prices ranging from CAD$2.60 to CAD$3.40 were exercised.

(ii) RSUs

The following is a summary of RSUs transactions:


				Weighted average
				grant date closing
	Number of shares			price per share $CAD
Balance, April 1, 2019	-		$	-
Granted	850,500			4.94
Cancelled	(31,750	)		4.94
Distributed	(141,376	)		4.94
Balance, March 31, 2020	677,374		$	4.94
Granted	1,021,500			6.68
Cancelled	(77,166	)		5.82
Distributed	(372,372	)		5.05
Balance, March 31, 2021	1,249,336		$	6.28

SILVERCORP METALS INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except per share and share data, unless otherwise stated)

During the year ended March 31, 2021, a total of 1,021,500 (year ended March 31, 2020- 850,500) RSUs were granted to directors, officers, and employees of the Company at weighted average grant date closing price of CAD$6.68 (year ended March 31, 2020- $4.94) per share subject to a vesting schedule over a three-year term with 1/6 of the RSUs vesting every six months from the date of grant.

Subsequent to March 31, 2021, a total of 1,000,000 RSUs were granted to directors, officers, and employees of the Company at grant date closing price of CAD$6.40 per share subject to a vesting schedule over a three-year term with 1/6 of the RSUs vesting every six months from the date of grant.

Subsequent to March 31, 2021, a total of 33,416 RSUs were distributed.

(c) Cash dividends declared

During the year ended March 31, 2021, dividends of $4,368 (year ended March 31, 2020 - $4,287) were declared and paid.

(d) Earnings per share (basic and diluted)


		For the years ended March 31,
			2021					2020
		Income	Shares		Per-Share		Income	Shares		Per-Share
		(Numerator)	(Denominator)		Amount		(Numerator)	(Denominator)		Amount
Net income attributable to equity holders of the Company	$	46,376				$	34,274
Basic earnings per share		46,376	174,868,256	$	0.27		34,274	171,713,263	$	0.20
Effect of dilutive securities:
Stock options and RSUs			2,205,748					2,366,124
Diluted earnings per share	$	46,376	177,074,004	$	0.26	$	34,274	174,079,387	$	0.20

Anti-dilutive options that are not included in the diluted EPS calculation were 490,000 for the year ended March 31, 2021 (year ended March 31, 2020 - nil).


13.	ACCUMULATED OTHER COMPREHENSIVE LOSS


		March 31, 2021			March 31, 2020
Change in fair value on equity investments designated as FVTOCI	$	22,328		$	34,879
Share of other comprehensive loss (income) in associate		589			(1,735	)
Currency translation adjustment		(10,367	)		28,445
Balance, end of the year	$	12,550		$	61,589

The change in fair value on equity investments designated as FVTOCI, share of other comprehensive income in associate, and currency translation adjustment are net of tax of $nil for all periods presented.

SILVERCORP METALS INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except per share and share data, unless otherwise stated)


14.	NON-CONTROLLING INTERESTS

The continuity of non-controlling interests is summarized as follows:


		Henan			Henan						Guangdong
		Found			Huawei			Yunxiang			Found			New Infini			Total
Balance, April 1, 2019	$	58,262		$	4,903		$	3,017		$	(447	)				$	65,735
Share of net income (loss)		10,440			664			(221	)		46						10,929
Share of other comprehensive loss		(2,768	)		(209	)		(73	)		(65	)					(3,115	)
Distributions		(2,603	)		(656	)		-			-						(3,259	)
Balance, March 31, 2020	$	63,331		$	4,702		$	2,723		$	(466	)	$	-		$	70,290
Share of net income		13,210			639			219			88			(23	)		14,133
Share of other comprehensive income		4,623			480			90			27			-			5,220
Acquisition of La Yesca (Note 3)		-			-			-			-			9,250			9,250
Contributions		-			-			-			-			2,500			2,500
Distributions		(2,600	)		(639	)		-			-			-			(3,239	)
Balance, March 31, 2021	$	78,564		$	5,182		$	3,032		$	(351	)	$	11,727		$	98,154

As at March 31, 2021, non-controlling interests in Henan Found, Henan Huawei, Yunxiang, Guangdong Found and New Infini were 22.5%, 20%, 30%, 1%, and 56.25%, respectively (March 31, 2020 - 22.5%, 20%, 30%, 1% and nil, respectively).

Henan Non-ferrous Geology Minerals Ltd. (“Henan Non-ferrous”) is the 17.5% equity interest holder of Henan Found. During the year ended March 31, 2021, Henan Found declared and paid dividends of $2,022 (year ended March 31, 2020 - declared and paid dividends of $2,025) to Henan Non-ferrous.

Henan Xinxiangrong Mining Ltd. (“Henan Xinxiangrong”) is the 5% equity interest holder of Henan Found. During the year ended March 31, 2021, Henan Found declared and paid dividends of $578 (year ended March 31, 2020 - declared and paid dividends of $578) to Henan Xinxiangrong.

Henan Xinhui Mining Co., Ltd. (“Henan Xinhui”) is a 20% equity interest holder of Henan Huawei. For the year ended March 31, 2021, Henan Huawei declared and paid dividends of $639 (year ended March 31, 2020 - $656) to Henan Xinhui.

In January 2021, New Infini conducted a private placement to raise funds for La Yesca Project’s operation (Note 3). Non-controlling shareholders of New Infini purchased a total of 5,000,000 New infini shares and contributed $2,500.

SILVERCORP METALS INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except per share and share data, unless otherwise stated)


15.	RELATED PARTY TRANSACTIONS

Related party transactions not disclosed elsewhere in the consolidated financial statements are as follows:


Due from related parties		March 31, 2021		March 31, 2020
NUAG (a)	$	59	$	94
WHG (b)		19		-
Henan Non-ferrous (c)		769		1,425
	$	847	$	1,519

(a)	The Company recovers costs for services rendered to NUAG and expenses incurred on behalf of NUAG pursuant to a services and administrative costs reallocation agreement. During the year ended March 31, 2021, the Company recovered $644 (year ended March 31, 2020 - $530), from NUAG for services rendered and expenses incurred on behalf of NUAG. The costs recovered from NUAG were recorded as a direct reduction of general and administrative expenses on the consolidated statements of income.

(b)	The Company recovers costs for services rendered to WHG and expenses incurred on behalf of WHG pursuant to a services and administrative costs reallocation agreement. During the year ended March 31, 2021, the Company recovered $89 (year ended March 31, 2020 - $nil), from WHG for services rendered and expenses incurred on behalf of WHG. The costs recovered from WHG were recorded as a direct reduction of general and administrative expenses on the consolidated statements of income.

(c)	In January 2020, Henan Found advanced a loan of $1,436 (RMB¥10 million) to Henan Non-ferrous. The loan has a term of four months and bears an interest rate of 4.35% per annum. In May 2020, the loan, including accumulated interest, of $1,423 (RMB¥10.1 million) was repaid in full.

	In January 2021, Henan Found advanced a loan of $744 (RMB¥5 million) to Henan Non-ferrous. The loan has a term of four months and bears an interest rate of 4.35% per annum.

The balances with related parties are unsecured.

(d) Compensation of key management personnel

The remuneration of directors and other members of key management personnel, who are those having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, for the years ended March 31, 2021 and 2020 were as follows:


		Years Ended March 31,
		2021		2020
Directors’ fees and bonus	$	306	$	293
Salaries and bonus for key management personnel		2,946		2,519
Share-based compensation		2,814		1,487
	$	6,066	$	4,299

Share-based compensation was measured at grant date fair value (see note 12(b)).

SILVERCORP METALS INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except per share and share data, unless otherwise stated)


16.	GENERAL AND ADMINISTRATIVE

General and administrative expenses consist of:


				Year ended March 31, 2021						Year ended March 31, 2020
		Corporate		Mines		Total		Corporate		Mines		Total
Amortization and depreciation	$	533	$	1,255	$	1,788	$	447	$	1,511	$	1,958
Office and administrative expenses		1,946		2,897		4,843		2,304		2,881		5,185
Professional fees		783		442		1,225		562		481		1,043
Salaries and benefits		4,947		4,993		9,940		4,245		5,183		9,428
Share-based compensation		4,156		-		4,156		2,536		-		2,536
	$	12,365	$	9,587	$	21,952	$	10,094	$	10,056	$	20,150


17.	GOVERNMENT FEES AND OTHER TAXES

Government fees and other taxes consist of:


		Year ended March 31,
		2021		2020
Government fees	$	63	$	210
Other taxes		2,311		1,905
	$	2,374	$	2,115

Government fees refer to the environmental protection fees paid to the state and local Chinese government. Other taxes were composed of surtax on value-added tax, land usage levy, stamp duty and other miscellaneous levies, duties and taxes imposed by the state and local Chinese government.


18.	FINANCE ITEMS

Finance items consist of:


		Year ended March 31,
Finance income		2021		2020
Interest income	$	3,767	$	4,023

		Year ended March 31,
Finance costs		2021		2020
Interest on bank loan	$	-	$	45
Interest on lease obligation		95		112
Expected credit loss of bonds		1,376		-
Loss on disposal of bonds		266		1,494
Unwinding of discount of environmental rehabilitation provision		251		422
	$	1,988	$	2,073

SILVERCORP METALS INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except per share and share data, unless otherwise stated)


19.	INCOME TAX

(a) Income tax expense

The significant components of income tax expense recognized in the statements of income are as follows:


		Year ended March 31,
Income tax expense		2021		2020
Current	$	10,942	$	5,613
Deferred		2,052		3,296
	$	12,994	$	8,909

The reconciliation of the Canadian statutory income tax rates to the effective tax rate is as follows:


		Years ended March, 31
		2021			2020
Canadian statutory tax rate		27.00	%		27.00	%
Income before income taxes	$	73,503		$	54,112
Income tax expense computed at Canadian statutory rates		19,846			14,610
Foreign tax rates different from statutory rate		(7,172	)		(2,255	)
Permanent items		2,567			760
Withholding taxes		1,191			2,782
Change in unrecognized deferred tax assets		(3,438	)		(6,988	)
Income tax expense	$	12,994		$	8,909

(b) Deferred income tax

The continuity of deferred income tax assets (liabilities) is summarized as follows:


		Years ended March, 31
		2021			2020
Net deferred income tax liabilities, beginning of the year	$	(35,758	)	$	(34,334	)
Deferred income tax expense recognized in net income for the year		(2,052	)		(3,296	)
Foreign exchange impact		(2,982	)		1,872
Net deferred income tax liabilities, end of the year	$	(40,792	)	$	(35,758	)

SILVERCORP METALS INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except per share and share data, unless otherwise stated)

The significant components of the Company’s deferred income tax are as follows:


		March 31, 2021			March 31, 2020
Deferred income tax assets
Plant and equipment	$	1,706		$	1,001
Environmental rehabilitation		1,716			1,948
Other deductible temporary difference		655			519
Total deferred income tax assets		4,077			3,468
Deferred income tax liabilities
Plant and equipment		(1,488	)		(1,258	)
Mineral rights and properties		(43,105	)		(37,601	)
Unrealized gain on investments		-			(65	)
Other taxable temporary difference		(276	)		(302	)
Total deferred income tax liabilities		(44,869	)		(39,226	)
Net deferred income tax liabilities	$	(40,792	)	$	(35,758	)

Deferred tax assets are recognized to the extent that the realization of the related tax benefit through future taxable profits is probable. The ability to realize the tax benefits is dependent upon numerous factors, including the future profitability of operations in the jurisdictions in which the tax benefits arose. Deductible temporary differences and unused tax losses for which no deferred tax assets have been recognized are attributable to the following:


		March 31, 2021		March 31, 2020
Non-capital loss carry forward	$	62,764	$	63,355
Plant and equipment		10,813		14,460
Mineral rights and properties		1,972		5,072
Other deductible temporary difference		21,669		11,819
	$	97,218	$	94,706

SILVERCORP METALS INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except per share and share data, unless otherwise stated)

As at March 31, 2021, the Company has the following net operating losses, expiring in various years to 2041 and available to offset future taxable income in Canada and China, respectively.


		Canada		China		Total
2022	$	-	$	1,494	$	1,494
2023		-		1,070		1,070
2024		-		1,279		1,279
2025		-		873		873
2030		1,911		-		1,911
2031		6,777		-		6,777
2032		9,830		-		9,830
2033		10,117		-		10,117
2034		7,951		-		7,951
2035		7,220		-		7,220
2036		54		-		54
2037		581		-		581
2038		2,539		-		2,539
2039		4,689		-		4,689
2040		2,142		-		2,142
2041		4,225		-		4,225
2042		12		-		12
	$	58,048	$	4,716	$	62,764

As at March 31, 2021, temporary differences of $143,568 (March 31, 2020 - $173,020) associated with the investments in subsidiaries have not been recognized as the Company is able to control the timing of the reversal of these differences which are not expected to reverse in the foreseeable future.


20.	CAPITAL DISCLOSURES

The Company’s objectives of capital management are intended to safeguard the entity’s ability to support the Company’s normal operating requirement on an ongoing basis, continue the development and exploration of its mineral properties, and support any expansionary plans.

The capital of the Company consists of the items included in equity less cash and cash equivalents and short-term investments. Risk and capital management are primarily the responsibility of the Company’s corporate finance function and is monitored by the Board of Directors. The Company manages the capital structure and makes adjustments depending on economic conditions. Funds have been primarily secured through profitable operations and issuances of equity capital. The Company invests all capital that is surplus to its immediate needs in short-term, liquid and highly rated financial instruments, such as cash and other short-term deposits, all held with major financial institutions. Significant risks are monitored and actions are taken, when necessary, according to the Company’s approved policies.

In addition, the current outbreak of COVID-19 has caused significant disruption to the global economic conditions which may adversely impact the Company’s results of operations. Moreover, COVID-19 has also negatively impacted on the stock markets, including the trading price of the Company’s common shares, which could adversely impact the Company’s ability to raise capital.

SILVERCORP METALS INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except per share and share data, unless otherwise stated)


21.	FINANCIAL INSTRUMENTS

The Company manages its exposure to financial risks, including liquidity risk, foreign exchange risk, interest rate risk, credit risk and equity price risk in accordance with its risk management framework. The Company’s Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework and reviews the Company’s policies on an ongoing basis.

(a)Fair value

The Company classifies its fair value measurements within a fair value hierarchy, which reflects the significance of the inputs used in making the measurements as defined in IFRS 13, Fair Value Measurement (“IFRS 13”).

Level 1 - Unadjusted quoted prices at the measurement date for identical assets or liabilities in active markets.

Level 2 - Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3 - Unobservable inputs which are supported by little or no market activity.

The following tables set forth the Company’s financial assets and liabilities that are measured at fair value level on a recurring basis within the fair value hierarchy as at March 31, 2021 and March 31, 2020 that are not otherwise disclosed. The assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.


		Fair value as at March 31, 2021
Recurring measurements		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	118,735	$	-	$	-	$	118,735
Short-term investments - money market instruments		64,545		-		-		64,545
Investments in public companies		13,444		-		-		13,444
Investments in private companies		-		-		2,289		2,289

		Fair value as at March 31, 2020
Recurring measurements		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	65,777	$	-	$	-	$	65,777
Short-term investments - money market instruments		53,430		-		-		53,430
Investments in public companies		6,633		-		-		6,633
Investments in private companies		-		-		2,117		2,117

Fair value of the other financial instruments excluded from the table above approximates their carrying amount as at March 31, 2021 and March 31, 2020, due to the short-term nature of these instruments.

There were no transfers into or out of Level 3 during the years ended March 31, 2021 and 2020.

SILVERCORP METALS INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except per share and share data, unless otherwise stated)

(b)Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its short-term business requirements. The Company has in place a planning and budgeting process to help determine the funds required to support the Company’s normal operating requirements on an ongoing basis and its expansion plans.

In the normal course of business, the Company enters into contracts that give rise to commitments for future minimum payments. The following summarizes the remaining contractual maturities of the Company’s financial liabilities.


				March 31, 2021				March 31, 2020
		Within a year		2-5 years		Total		Total
Accounts payable and accrued liabilities		30,298		-		30,298		23,129
Lease obligation		657		1,084		1,741		2,069
	$	30,955	$	1,084	$	32,039	$	25,198

(c) Foreign exchange risk

The Company reports its financial statements in US dollars. The functional currency of the head office, Canadian subsidiaries and all intermediate holding companies is CAD and the functional currency of all Chinese subsidiaries is RMB. The Company is exposed to foreign exchange risk when the Company undertakes transactions and holds assets and liabilities in currencies other than its functional currencies. The Company currently does not engage in foreign exchange currency hedging. The Company’s exposure to currency risk affect net income is summarized as follows:


		March 31, 2021		March 31, 2020
Financial assets denominated in U.S. Dollars	$	58,610	$	60,534
Financial liabilities denominated in U.S. Dollars	$	52	$	-

As at March 31, 2021, with other variables unchanged, a 10% strengthening (weakening) of the CAD against the USD would have decreased (increased) net income by approximately $5.9 million.

(d)Interest rate risk

The Company is exposed to interest rate risk on its cash equivalents, short term investments, and loan to one of the related parties. As at March 31, 2021, all of its interest-bearing cash equivalents and short term investments earn interest at market rates that are fixed to maturity or at variable interest rates with terms of less than one year. The loan to the related party bears an interest rate of 4.35% per annum, which approximates the prevailing commercial lending rates in China as of March 31, 2021. The Company monitors its exposure to changes in interest rates on cash equivalents, short term investments, and loan to the related party. Due to the short term nature of these financial instruments, fluctuations in interest rates would not have a significant impact on the Company’s net income.

SILVERCORP METALS INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except per share and share data, unless otherwise stated)

(e) Credit risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company is exposed to credit risk primarily associated to accounts receivable, due from related parties, cash and cash equivalents, and short-term investments. The carrying amount of assets included on the balance sheet represents the maximum credit exposure.

The Company undertakes credit evaluations on counterparties as necessary, requests deposits from customers prior to delivery, and has monitoring processes intended to mitigate credit risks. There were no amounts in trade or other receivables which were past due on March 31, 2021 (at March 31, 2020 - $nil) for which no provision is recognized.

(f) Equity price risk

The Company holds certain marketable securities that will fluctuate in value as a result of trading on Canadian financial markets. As the Company’s marketable securities holdings are mainly in mining companies, the value will also fluctuate based on commodity prices. Based upon the Company’s portfolio as at March 31, 2021, a 10% increase (decrease) in the market price of the securities held, ignoring any foreign currency effects, would have resulted in an increase (decrease) to net income and comprehensive income of approximately $1,048 and $297, respectively.


22.	SEGMENTED INFORMATION

The Company’s operating segments are components of the Company where discrete financial information is available that is evaluated regularly by the Company’s Chief Executive Officer who is the Chief Operating Decision Maker (“CODM”). The operating segments are determined based on the Company’s management and internal reporting structure. Operating segments are summarized as follows:


Operational Segments	Subsidiaries Included in the Segment	Properties Included in the Segment
Mining
Henan Luoning	Henan Found and Henan Huawei	Ying Mining District
Hunan	Yunxiang	BYP
Guangdong	Guangdong Found	GC
Other	Infini Resources S.A. de C.V. , Songxian Gold Mining Co., Ltd. (“SX Gold”) (i)	La Yesca and XHP
Administrative
Vancouver	Silvercorp Metals Inc. and holding companies
Beijing	Silvercorp Metals (China) Inc.

(i)	SX Gold was disposed in April 2019.

SILVERCORP METALS INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except per share and share data, unless otherwise stated)

(a)	Segmented information for assets and liabilities are as follows:


March 31, 2021
		Mining									Administrative
		Henan													Total
Statement of financial position items:		Luoning		Hunan	Guangdong				Other		Beijing		Vancouver
Current assets	$	124,636	$	909		$	11,177	$	191	$	4,322	$	79,954	$	221,189
Plant and equipment		53,651		3,833			15,765		59		965		1,456		75,729
Mineral rights and properties		225,023		7,345			28,314		16,747		-		-		277,429
Investment in an associate		-		-			-		-		-		53,457		53,457
Other investments		2,289		-			-		-		-		13,444		15,733
Reclamation deposits		3,898		-			4,607		-		-		8		8,513
Long-term prepaids and deposits		221		101			87		-		-		-		409
Long-term portion of lease receivable		-		-			-		-		-		183		183
Total assets	$	409,718	$	12,188		$	59,950	$	16,997	$	5,287	$	148,502	$	652,642
Current liabilities	$	28,654	$	625		$	4,570	$	-	$	112	$	3,214	$	37,175
Long-term portion of lease obligation		-		-			-		-		-		1,084		1,084
Deferred income tax liabilities		39,756		1,036			-		-		-		-		40,792
Environmental rehabilitation		6,115		993			755		-		-		-		7,863
Total liabilities	$	74,525	$	2,654		$	5,325	$	-	$	112	$	4,298	$	86,914

March 31, 2020
		Mining									Administrative
		Henan													Total
Statement of financial position items:		Luoning		Hunan	Guangdong				Other		Beijing		Vancouver
Current assets	$	80,160	$	1,467		$	3,665	$	-	$	4,289	$	68,598	$	158,179
Plant and equipment		45,113		3,893			15,261		-		862		1,593		66,722
Mineral rights and properties		192,746		6,884			24,956		-		-		-		224,586
Investment in an associate		-		-			-		-		-		44,555		44,555
Other investments		2,117		-			-		-		-		6,633		8,750
Reclamation deposits		5,043		-			4,180		-		-		7		9,230
Long-term prepaids and deposits		205		99			86		-		-		-		390
Long-term portion of lease receivable		-		-			-		-		-		348		348
Total assets	$	325,384	$	12,343		$	48,148	$	-	$	5,151	$	121,734	$	512,760
Current liabilities	$	19,495	$	1,322		$	3,154	$	-	$	625	$	3,232	$	27,828
Long-term portion of lease obligation		-		-			-		-		-		1,502		1,502
Deferred income tax liabilities		34,761		997			-		-		-		-		35,758
Environmental rehabilitation		6,775		1,015			910		-		-		-		8,700
Total liabilities	$	61,031	$	3,334		$	4,064	$	-	$	625	$	4,734	$	73,788

SILVERCORP METALS INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except per share and share data, unless otherwise stated)

(b)	Segmented information for operating results are as follows:


Year ended March 31, 2021
		Mining												Administrative
		Henan																		Total
Statement of income:		Luoning			Hunan		Guangdong				Other			Beijing			Vancouver
Revenue	$	157,297		$	1,553		$	33,255		$	-		$	-		$	-		$	192,105
Costs of mine operations		(83,090	)		(1,356	)		(23,497	)		-			-			-			(107,943	)
Income from mine operations		74,207			197			9,758			-			-			-			84,162
Operating expenses		(1,848	)		576			9			(6	)		(1,012	)		(10,157	)		(12,438	)
Finance items, net		1,788			(29	)		145			-			118			(243	)		1,779
Income tax expenses		(10,876	)		41			(960	)		-			(8	)		(1,191	)		(12,994	)
Net income (loss)	$	63,271		$	785		$	8,952		$	(6	)	$	(902	)	$	(11,591	)	$	60,509
Attributable to:
Equity holders of the Company		49,422			566			8,864			(3	)		(902	)		(11,571	)		46,376
Non-controlling interests		13,849			219			88			(3	)		-			(20	)		14,133
Net income (loss)	$	63,271		$	785		$	8,952		$	(6	)	$	(902	)	$	(11,591	)	$	60,509
⁽¹⁾Hunan’s BYP project was placed on care and maintenance in August 2014.

Year ended March 31, 2020
		Mining												Administrative
		Henan																		Total
Statement of income:		Luoning			Hunan		Guangdong				Other			Beijing			Vancouver
Revenue	$	131,434		$	-		$	27,395		$	-		$	-		$	-		$	158,829
Costs of mine operations		(77,337	)		(403	)		(21,689	)		-			(26	)		-			(99,455	)
Income from mine operations		54,097			(403	)		5,706			-			(26	)		-			59,374
Operating income (expenses)		333			(134	)		(178	)		(60	)		(1,590	)		(5,583	)		(7,212	)
Finance items, net		1,366			(147	)		136			-			133			462			1,950
Income tax recoveries (expenses)		(5,013	)		(53	)		(1,060	)		-			(1	)		(2,782	)		(8,909	)
Net income (loss)	$	50,783		$	(737	)	$	4,604		$	(60	)	$	(1,484	)	$	(7,903	)	$	45,203
Attributable to:
Equity holders of the Company		39,679			(516	)		4,558			(60	)		(1,484	)		(7,903	)		34,274
Non-controlling interests		11,104			(221	)		46			-			-			-			10,929
Net income (loss)	$	50,783		$	(737	)	$	4,604		$	(60	)	$	(1,484	)	$	(7,903	)	$	45,203

SILVERCORP METALS INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except per share and share data, unless otherwise stated)

The sales generated for the years ended March 31, 2021 and 2020 were all earned in China and are comprised of:


				Year ended March 31, 2021
		Henan Luoning		Hunan		Guangdong		Total
Silver (Ag)	$	102,100	$	-	$	9,091	$	111,191
Gold (Au)		5,169		1,553		-		6,722
Lead (Pb)		42,836		-		7,628		50,464
Zinc (Zn)		5,898		-		15,895		21,793
Other		1,294		-		641		1,935
	$	157,297	$	1,553	$	33,255	$	192,105

				Year ended March 31, 2020
		Henan Luoning		Hunan		Guangdong		Total
Silver (Ag)	$	77,617	$	-	$	7,255	$	84,872
Gold (Au)		3,911		-		-		3,911
Lead (Pb)		43,312		-		8,654		51,966
Zinc (Zn)		4,911		-		10,869		15,780
Other		1,683		-		617		2,300
	$	131,434	$	-	$	27,395	$	158,829

(d) Major customers

For the year ended March 31, 2021, five major customers (year ended March 31, 2020 - five) accounted for 11%, 12%, 15%, 16%, and 21%, respectively (year ended March 31, 2020 - 11%, 12%, 16%, 19%, and 22%, respectively) and collectively 75% (year ended March 31, 2020 - 81%) of the total sales of the Company as reported across the Henan Luoning and Guangdong segments.


23.	SUPPLEMENTARY CASH FLOW INFORMATION


		March 31, 2021		March 31, 2020
Cash on hand and at bank	$	111,191	$	65,251
Bank term deposits and GICs		7,544		526
Total cash and cash equivalents	$	118,735	$	65,777


Changes in non-cash operating working capital:		Years Ended March 31,
		2021			2020
Trade and other receivables	$	(470	)	$	330
Inventories		(859	)		1,798
Prepaids and deposits		(1,133	)		184
Accounts payable and accrued liabilities		4,158			(1,616	)
Deposits received		1,352			1,236
Due from a related party		27			(170	)
	$	3,075		$	1,762

EX-99.5 6 exhibit99-5.htm MD&A FOR YEAR ENDED MARCH 31, 2021 Exhibit 99.5

Exhibit 99.5

SILVERCORP METALS INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS For the Year Ended March 31, 2021

(Expressed in thousands of US dollars, except per share figures or otherwise stated)

Table of Contents


1.	Core Business and Strategy	2
2.	Fiscal Year 2021 Highlights	2
3.	Fourth Quarter of Fiscal Year 2021 Highlights	3
4.	Operating Performance	4
5.	Fiscal 2022 Operating Outlook	14
6.	Investment in Associates	15
7.	Overview of Financial Results	18
8.	Liquidity and Capital Resources	24
9.	Financial Instruments and Related Risks	26
10.	Off-Balance Sheet Arrangements	28
11.	Transactions with Related Parties	28
12.	Alternative Performance (Non-IFRS) Measures	29
13.	Critical Accounting Policies, Judgments, and Estimates	33
14.	New Accounting Standards	33
15.	Other MD&A Requirements	33
16.	Outstanding Share Data	34
17.	Risks and Uncertainties	34
18.	Corporate Governance, Safety, Environment ad Social Responsibility	38
19.	Disclosure Controls and Procedures	40
20.	Management’s Report on Internal Control over Financial Reporting	40
21.	Changes in Internal Control over Financial Reporting	40
22.	Directors and Officers	41
Technical Information		41
Forward Looking Statements		41

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Year Ended March 31, 2021

(Expressed in thousands of U.S. dollars, except per share data or unless otherwise stated)

This Management’s Discussion and Analysis (“MD&A”) is intended to help the reader understand the significant factors that have affected Silvercorp Metals Inc. and its subsidiaries’ (“Silvercorp” or the “Company”) performance and such factors that may affect its future performance. This MD&A should be read in conjunction with the Company’s audited consolidated financial statements for the year ended March 31, 2021 and the related notes contained therein. The Company reports its financial position, financial performance and cash flow in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). Silvercorp’s significant accounting policies are set out in Note 2 of the audited consolidated financial statements for the year ended March 31, 2021. This MD&A refers to various alternative performance (non-IFRS) measures, such as working capital; cash cost per ounce of silver, net of by-product credits, all-in & all-in sustaining cost per ounce of silver, net of by-product credits; production cost per tonne, and all-in sustaining production costs per tonne. Non-IFRS measures do not have standardized meanings under IFRS. Accordingly, non-IFRS measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. To facilitate a better understanding of these measures as calculated by the Company, additional information has been provided in this MD&A. Please refer to section 12, “Alternative Performance (Non-IFRS) Measures” of this MD&A for detailed descriptions and reconciliations. Figures may not add due to rounding.

This MD&A is prepared as of May 19, 2021 and expressed in thousands of U.S. dollars, except share, per share, unit cost, and production data, or unless otherwise stated.


1.	Core Business and Strategy

Silvercorp is a profitable Canadian mining company currently producing silver, gold, lead, and zinc metals in concentrates from mines in China. The Company’s goal is to continuously create healthy returns to shareholders through efficient management, organic growth and the acquisition of profitable projects. Silvercorp balances profitability, social and environmental relationships, employees’ wellbeing, and sustainable development. Silvercorp operates several silver-lead-zinc mines at the Ying Mining District in Henan Province, China and the GC silver-lead-zinc mine in Guangdong Province, China. The Company’s common shares are traded on the Toronto Stock Exchange and NYSE American under the symbol “SVM”.


2.	Fiscal Year 2021 Highlights

Mined 964,925 tonnes of ore and milled 967,581 tonnes of ore, up 9% and 8%, respectively, compared to the prior year, with silver and lead production meeting the production guidance and zinc production beating the production guidance;
Sold approximately 6.3 million ounces of silver, 4,700 ounces of gold, 67.1 million pounds of lead, and 27.9 million pounds of zinc, up 1%, 42%, 3%, and 10%, respectively, compared to the prior year;
Revenue of $192.1 million, up 21% compared to $158.8 million in the prior year;
Net income attributable to equity shareholders of $46.4 million, or $0.27 per share, up 35% compared to $34.3 million, or $0.20 per share in the prior year;
Cash cost per ounce of silver¹, net of by-product credits, of negative $1.80 compared to negative $1.91 in the prior year;
All-in sustaining cost per ounce of silver¹, net of by-product credits, of $7.49, compared to $6.86 in the prior year;
Cash flow from operations of $85.9 million, up 11% or $8.7 million compared to $77.2 million in the prior year;
Received $6.5 million (CAD$9.0 million) break fee from Guyana Goldfields Inc. (“Guyana Goldfields”) and realized a gain of $15.4 million on disposal of the shares of Guyana Goldfields;



¹ Non-IFRS measures, please refer to section 12 for reconciliation.
	Management’s Discussion and Analysis	Page 2

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Year Ended March 31, 2021

(Expressed in thousands of U.S. dollars, except per share data or unless otherwise stated)

Paid $4.4 million of dividends to the Company’s shareholders;
Invested $5.8 million in a private placement of New Pacific Metals Corp. (“NUAG”) to maintain the Company’s ownership interest;
Acquired a 26.99% interest in Whitehorse Gold Corp. (“WHG”), having a fair market value of $15.1 million as at March 31, 2021, as a result of (a) receiving 5,740,285 WHG common shares under a spin-out transaction completed by NUAG, and (b) subscribing for 5,774,000 WHG common shares under a private placement at total of $1.3 million;
Won an online auction to acquire the exploration rights to the Zhonghe Silver Project from the Henan provincial government of China for approximately $76.0 million ((RMB¥495.0 million), with the mineral rights transfer contract pending the national security clearance by the related authorities;
Acquired a 43.8% interest in the La Yesca Silver Project in Mexico through a new corporate structure, New Infini Silver Inc. for approximately $9.1 million; and
Strong balance sheet with $199.1 million in cash and cash equivalents and short-term investments, an increase of $56.6 million or 40% compared to $142.5 million as at March 31, 2020. This does not include $212.1 million in total market value of investments in associates and equity investment in other companies as at March 31, 2021.


3.	Fourth Quarter of Fiscal Year 2021 Highlights

Mined 163,072 tonnes of ore and milled 180,674 tonnes of ore, up 53% and 76%, respectively, compared to the prior year quarter;
Sold approximately 1.1 million ounces of silver, 700 ounces of gold, 10.9 million pounds of lead, and 4.6 million pounds of zinc, up 32%, 40%, 13%, and 50% respectively, compared to approximately 0.8 million ounces of silver, 500 ounces of gold, 9.7 million pounds of lead, and 3.1 million pounds of zinc in the prior year quarter;
Revenue of $35.7 million, up 89% or $16.8 million compared to $18.9 million in the prior year quarter;
Net income attributable to equity shareholders of $7.0 million, or $0.04 per share, compared to $3.2 million or $0.02 per share, in the prior year quarter;
Cash cost per ounce of silver, net of by-product credits, of negative $0.39 compared to negative $0.85 in the prior year quarter;
All-in sustaining cost per ounce of silver, net of by-product credits, of $12.55, compared to $15.17 in the prior year quarter; and
Cash flow from operations of $2.2 million, compared to $6.3 million in the prior year quarter. The decrease was mainly due to $9.4 million use of cash from working capital changes. Before changes in non-cash working capital, cash flows provided by operating activities in the current quarter were $11.9 million, up $2.7 million compared to $9.2 million in Q4 Fiscal 2020.


	Management’s Discussion and Analysis	Page 3

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Year Ended March 31, 2021

(Expressed in thousands of U.S. dollars, except per share data or unless otherwise stated)


4.	Operating Performance


(a)	Consolidated operating performance

The following table summarizes consolidated operational information for the three months and the year ended March 31, 2021 and 2020:


Consolidated				Three months ended March 31,						Year ended March 31,
				2021		2020		Changes		2021		2020		Changes
Production Data
	Mine Data
		Ore Mined (tonne)		163,072		106,595		53	%	964,925		885,830		9	%
		Ore Milled (tonne)		180,674		102,431		76	%	967,581		892,215		8	%

		Head Grades
			Silver (gram/tonne)	228		231		-1	%	223		240		-7	%
			Lead (%)	3.3		3.7		-11	%	3.4		3.7		-8	%
			Zinc (%)	1.5		1.8		-17	%	1.7		1.7		0	%

		Recovery Rates
			Silver (%)	92.5		93.4		-1	%	92.7		93.5		-1	%
			Lead (%)	94.3		94.8		0	%	95.0		94.8		0	%
			Zinc (%)	79.0		80.3		-2	%	80.0		77.8		3	%

Cost Data
	+	Mining cost per tonne of ore mined ($)		94.86		75.91		25	%	79.73		76.25		5	%
			Cash mining cost per tonne of ore mined ($)	70.56		53.26		32	%	59.44		54.90		8	%
			Depreciation and amortization charges per tonne of ore mined ($)	24.30		22.65		7	%	20.29		21.35		-5	%

	+	Unit shipping costs ($)		2.48		2.57		-4	%	2.54		2.65		-4	%

	+	Milling costs per tonne of ore milled ($)		15.10		15.67		-4	%	12.41		13.17		-6	%
			Cash milling costs per tonne of ore milled ($)	12.66		13.10		-3	%	10.73		11.36		-6	%
			Depreciation and amortization charges per tonne of ore milled ($)	2.44		2.57		-5	%	1.68		1.81		-7	%

	+	Cash production cost per tonne of ore processed ($)		85.70		68.93		24	%	72.71		68.91		6	%
	+	All-in sustaining cost per tonne of ore processed ($)		156.36		188.57		-17	%	128.20		125.29		2	%

	+	Cash cost per ounce of Silver, net of by-product credits ($)		(0.39	)	(0.85	)	54	%	(1.80	)	(1.91	)	6	%
	+	All-in sustaining cost per ounce of silver, net of by-product credits ($)		12.55		15.17		-17	%	7.49		6.86		9	%

Concentrate inventory
		Lead concentrate (tonne)		2,089		2,520		-17	%	2,089		2,520		-17	%
		Zinc concentrate (tonne)		471		370		27	%	471		370		27	%

Sales Data
	Metal Sales
		Silver (in thousands of ounces)		1,056		800		32	%	6,315		6,257		1	%
		Gold (in thousands of ounces)		0.7		0.5		40	%	4.7		3.3		42	%
		Lead (in thousands of pounds)		10,876		9,654		13	%	67,118		65,344		3	%
		Zinc (in thousands of pounds)		4,580		3,059		50	%	27,914		25,401		10	%

	Revenue
		Silver (in thousands of $)		21,239		9,834		116	%	111,191		84,872		31	%
		Gold (in thousands of $)		1,006		625		61	%	6,722		3,911		72	%
		Lead (in thousands of $)		8,849		6,454		37	%	50,464		51,966		-3	%
		Zinc (in thousands of $)		4,480		1,546		190	%	21,793		15,780		38	%
		Other (in thousands of $)		158		401		-61	%	1,935		2,300		-16	%
				35,732		18,860		89	%	192,105		158,829		21	%

	Average Selling Price, Net of Value Added Tax and Smelter Charges
		Silver ($ per ounce)		20.11		12.29		64	%	17.61		13.56		30	%
		Gold ($ per ounce)		1,437		1,250		15	%	1,430		1,185		21	%
		Lead ($ per pound)		0.81		0.67		21	%	0.75		0.80		-6	%
		Zinc ($ per pound)		0.98		0.51		92	%	0.78		0.62		26	%

+ Alternative performance (Non-IFRS) measures, see section 12 for reconciliation.


	Management’s Discussion and Analysis	Page 4

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Year Ended March 31, 2021

(Expressed in thousands of U.S. dollars, except per share data or unless otherwise stated)


(i)	Mine and Mill Production

In Fiscal 2021, on a consolidated basis, the Company mined 964,925 tonnes of ore, up 9% or 79,095 tonnes, compared to 885,830 tonnes in Fiscal 2020. Ore milled in Fiscal 2021 was 967,581 tonnes, up 8% or 75,366 tonnes, compared to 892,215 tonnes in Fiscal 2020.

In Q4 Fiscal 2021, the Company mined 163,072 tonnes of ore, up 53% or 56,477 tonnes, compared to 106,595 tonnes in the three months ended March 31, 2020 (“Q4 Fiscal 2020”). Ore milled in Q4 Fiscal 2021 was 180,674 tonnes, up 76% or 78,243 tonnes, compared to 102,431 tonnes in Q4 Fiscal 2020. The increase was mainly due to an extra month operational shutdown due to COVID-19 in Q4 Fiscal 2020.


(ii)	Metal Sales

In Fiscal 2021, the Company sold approximately 6.3 million ounces of silver, 4,700 ounces of gold, 67.1 million pounds of lead, and 27.9 million pounds of zinc, up 1%, 42%, 3% and 10%, respectively, compared to 6.3 million ounces of silver, 3,300 ounces of gold, 65.3 million pounds of lead, and 25.4 million pounds of zinc in Fiscal 2020.

In Q4 Fiscal 2021, the Company sold approximately 1.1 million ounces of silver, 700 ounces of gold, 10.9 million pounds of lead, and 4.6 million pounds of zinc, up 32%, 40%, 13%, and 50%, respectively, compared to approximately 0.8 million ounces of silver, 500 ounces of gold, 9.7 million pounds of lead, and 3.1 million pounds of zinc in Q4 Fiscal 2020.


(iii)	Per Tonne Production Costs¹

In Fiscal 2021, the consolidated total mining cost and cash mining cost were $79.73 and $59.44 per tonne, up 5% and 8%, respectively, compared to $76.25 and $54.90 per tonne, respectively, in Fiscal 2020. The increase in the cash mining cost was mainly due to an increase of $3.0 million in the direct mining contractors’ cost.

The consolidated total milling cost and cash milling cost were $12.41 and $10.73 per tonne, down 6% and 6%, compared to $13.17 and $11.36 per tonne, respectively, in Fiscal 2020. The improvement was mainly due to a decrease of $0.3 million in mill administration costs.

The consolidated cash production cost per tonne of ore processed in Fiscal 2021 was $72.71, up 6% compared to $68.91 in Fiscal 2020 but in line with the Company’s annual guidance. The consolidated all-in sustaining production cost per tonne of ore processed was $128.20, an increase of 2% compared to $125.29 in Fiscal 2020, but also in line with the Company’s annual guidance.

In Q4 Fiscal 2021, the consolidated total mining cost and cash mining cost were $94.86 and $70.56 per tonne, up 25% and 32%, respectively, compared to $75.91 and $53.26 per tonne in Q4 Fiscal 2020. The increase was mainly due to certain fixed overhead costs related to mining operations expensed directly as mine general and administrative expense during the extra month operational shut-down in Q4 Fiscal 2020. The consolidated total milling cost and cash milling cost in Q4 Fiscal 2021 were $15.10 and $12.66 per tonne, down 4% and 3%, respectively, compared to $15.67 and $13.10 per tonne in Q4 Fiscal 2020. Correspondingly, the consolidated cash production cost per tonne of ore processed in Q4 Fiscal 2021 was $85.70, up 24% compared to $68.93 in Q4 Fiscal 2020. The consolidated all-in sustaining production cost per tonne was $156.36, down 17%, compared to $188.57 in Q4 Fiscal 2020.The decrease was mainly due to higher production resulting in lower per tonne fixed costs allocation.



¹ Alternative Performance (Non-IFRS) measure. Please refer to section 12 for reconciliation.
	Management’s Discussion and Analysis	Page 5

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Year Ended March 31, 2021

(Expressed in thousands of U.S. dollars, except per share data or unless otherwise stated)


(iv)	Costs per Ounce of Silver, Net of By-Product Credits

In Fiscal 2021, the consolidated cash cost per ounce of silver, net of by-product credits, was negative $1.80, compared to negative $1.91 in the prior year. The increase was mainly due to the increase of 6% in per tonne cash production costs as discussed above, offset by an increase of $0.99 in by-product credits per ounce of silver. Sales from lead and zinc in Fiscal 2021 amounted to $72.3 million, up $4.6 million, compared to $67.7 million in Fiscal 2020.

The consolidated all-in sustaining cost per ounce of silver, net of by-product credits, was $7.49, compared to $6.86 in Fiscal 2020. The increase was mainly due to the increase of 2% in per tonne all-in sustaining production cost as discussed above, offset by an increase of $0.99 in by-product credits per ounce of silver.

In Q4 Fiscal 2021, the consolidated cash cost per ounce of silver, net of by-product credits, was negative $0.39, compared to negative $0.85 in Q4 Fiscal 2020. The increase was mainly due to the increase in per tonne cash production as discussed above, offset by an increase of $2.44 in by-product credits per ounce of silver.

The consolidated all-in sustaining cost per ounce of silver, net of by-product credits, was $12.55, compared to $15.17 in Q4 Fiscal 2020. The decrease was mainly due to the decrease in the per tonne all-in sustaining production cost as discussed above and an increase of $0.18 in all-in sustaining costs per ounce of silver.


(v)	Exploration and Development

In Fiscal 2021, on a consolidated basis, a total of 254,900 metres or $8.7 million worth of diamond drilling were completed (Fiscal 2020 – 108,156 metres or $3.5 million), of which approximately 196,320 metres or $5.0 million worth of underground drilling were expensed as part of mining costs (Fiscal 2020 – 108,156 metres or $3.5 million) and approximately 58,580 metres or $3.7 million worth of surface drilling were capitalized (Fiscal 2020 – nil). In addition, approximately 34,637 metres or $8.9 million worth of preparation tunnelling was completed and expensed as part of mining costs (Fiscal 2020 – 38,403 metres or $10.3 million), and approximately 85,221 metres or $31.5 million worth of tunnels, raises, ramps and declines were completed and capitalized (Fiscal 2020 –73,567 metres or $26.3 million).

In Q4 Fiscal 2021, on a consolidated basis, a total of 49,459 metres or $1.6 million worth of diamond drilling were completed (Q4 Fiscal 2020 – 14,612 metres or $0.5 million), of which approximately 41,572 metres or $0.8 million worth of underground drilling were expensed as part of mining costs (Q4 Fiscal 2020 – 14,612 metres or $0.5 million), and approximately 7,887 metres or $0.8 million worth of surface drilling were capitalized (Q4 Fiscal 2020 – nil). In addition, approximately 7,015 metres or $1.5 million worth of preparation tunnelling was completed and expensed as part of mining costs (Q4 Fiscal 2020 – 2,163 metres or $0.7 million), and approximately 10,803 metres or $4.7 million worth of horizontal tunnels, raises, ramps and declines were completed and capitalized (Q4 Fiscal 2020 – 9,830 metres or $4.3 million).


	Management’s Discussion and Analysis	Page 6

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Year Ended March 31, 2021

(Expressed in thousands of U.S. dollars, except per share data or unless otherwise stated)


(b)	Individual Mine Performance


(i)	*Ying Mining Distric*t

The following table summarize the operational information at the Ying Mining District for the three months and the year ended March 31, 2021 and 2020. The Ying Mining District is the Company’s primary source of production, and consists of several mines, including the SGX, HPG, TLP, LME, LMW, and HZG mines.


Ying Mining District				Three months ended March 31,				Year ended March 31,
				2021	2020	Changes		2021		2020		Changes
Production Data
	Mine Data
		Ore Mined (tonne)		112,561	69,379	62	%	650,025		598,197		9	%
		Ore Milled (tonne)		131,725	69,188	90	%	651,402		601,605		8	%

		Head Grades
			Silver (gram/tonne)	280	297	-6	%	290		309		-6	%
			Lead (%)	3.9	4.6	-15	%	4.3		4.6		-7	%
			Zinc (%)	0.8	1.0	-20	%	0.8		0.9		-11	%

		Recovery Rates
			Silver (%)	93.7	95.3	-2	%	94.2		96.0		-2	%
			Lead (%)	95.1	95.7	-1	%	96.0		95.9		0	%
			Zinc (%)	65.0	67.7	-4	%	62.4		63.2		-1	%

Cost Data
	+	Mining cost per tonne of ore mined ($)		113.40	97.79	16	%	95.27		90.61		5	%
			Cash mining cost per tonne of ore mined ($)	83.35	68.10	22	%	69.56		63.00		10	%
			Depreciation and amortization charges per tonne of ore mined ($)	30.05	29.69	1	%	25.71		27.61		-7	%

	+	Unit shipping costs ($)		3.55	3.96	-10	%	3.76		3.92		-4	%

	+	Milling costs per tonne of ore milled ($)		13.67	14.31	-4	%	11.52		12.03		-4	%
			Cash milling cost per tonne of ore milled ($)	11.23	11.53	-3	%	9.69		10.16		-5	%
			Depreciation and amortization charges per tonne of ore milled ($)	2.44	2.78	-12	%	1.83		1.87		-2	%

	+	Cash production cost per tonne of ore processed ($)		98.13	83.59	17	%	83.01		77.08		8	%
	+	All-in sustaining cost per tonne of ore processed ($)		155.14	195.78	-21	%	132.54		132.52		0	%

	+	Cash cost per ounce of Silver, net of by-product credits ($)		1.20	0.30	300	%	(0.39	)	(1.18	)	67	%
	+	All-in sustaining cost per ounce of Silver, net of by-product credits ($)		10.00	11.86	-16	%	6.09		5.49		11	%

Concentrate inventory
		Lead concentrate (tonne)		1,922	2,475	-22	%	1,922		2,475		-22	%
		Zinc concentrate (tonne)		218	280	-22	%	218		280		-22	%

Sales Data
	Metal Sales
		Silver (in thousands of ounces)		936	711	32	%	5,610		5,558		1	%
		Gold (in thousands of ounces)		0.7	0.5	40	%	3.5		3.3		6	%
		Lead (in thousands of pounds)		9,137	8,322	10	%	56,708		54,459		4	%
		Zinc (in thousands of pounds)		1,306	865	51	%	6,968		7,264		-4	%

	Revenue
		Silver (in thousands of $)		19,474	8,968	117	%	102,100		77,617		32	%
		Gold (in thousands of $)		1,006	625	61	%	5,169		3,911		32	%
		Lead (in thousands of $)		7,450	5,562	34	%	42,836		43,312		-1	%
		Zinc (in thousands of $)		1,342	452	197	%	5,898		4,911		20	%
		Other (in thousands of $)		182	74	146	%	1,294		1,683		-23	%
				29,454	15,681	88	%	157,297		131,434		20	%

	Average Selling Price, Net of Value Added Tax and Smelter Charges
		Silver ($ per ounce)		20.81	12.61	65	%	18.20		13.96		30	%
		Gold ($ per ounce)		1,437	1,250	15	%	1,477		1,185		25	%
		Lead ($ per pound)		0.82	0.67	22	%	0.76		0.80		-5	%
		Zinc ($ per pound)		1.03	0.52	98	%	0.85		0.68		25	%

+ Alternative Performance (Non-IFRS) measures, see section 12 for reconciliation


	Management’s Discussion and Analysis	Page 7

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Year Ended March 31, 2021

(Expressed in thousands of U.S. dollars, except per share data or unless otherwise stated)

Fiscal 2021 vs. Fiscal 2020

In Fiscal 2021, the total ore mined at the Ying Mining District was 650,025 tonnes, up 9%, compared to 598,197 tonnes mined in Fiscal 2020. Ore milled was 651,402 tonnes, up 8%, compared to 601,605 tonnes in Fiscal 2020.

Head grades of ore milled at the Ying Mining District in Fiscal 2021 were 290 grams per tonne (“g/t”) for silver, 4.3% for lead, and 0.8% for zinc, compared to 309 g/t for silver, 4.6% for lead, and 0.9% for zinc in Fiscal 2020.

In Fiscal 2021, the Ying Mining District sold approximately 5.6 million ounces of silver, 3,500 ounces of gold, and 56.7 million pounds of lead, up 1%, 6%, and 4%, respectively, compared to 5.6 million ounces of silver, 3,300 ounces of gold, and 54.5 million pounds of lead in Fiscal 2020, while zinc sold was 7.0 million pounds, down 4% compared to 7.3 million pounds in Fiscal 2020.

The total mining cost and cash mining cost per tonne at the Ying Mining District in Fiscal 2021 were $95.27 and $69.56 per tonne, respectively, compared to $90.61 and $63.00 per tonne, respectively, in Fiscal 2020. Total milling cost and cash milling cost per tonne at the Ying Mining District in Fiscal 2021 were $11.52 and $9.69, down 4% and 5%, respectively, compared to $12.03 and $10.16, respectively, in Fiscal 2020.

Correspondingly, the cash production cost per tonne of ore processed at the Ying Mining District in Fiscal 2021 was $83.01, up 8% compared to $77.08 in Fiscal 2020 and slightly higher than the annual guidance. The all-in sustaining cost per tonne of ore processed was $132.54, comparable to $132.52 in Fiscal 2020 and below the annual guidance.

The cash cost per ounce of silver, net of by-product credits, at the Ying Mining District in Fiscal 2021, was negative $0.39, compared to negative $1.18 in Fiscal 2020. The all-in sustaining cost per ounce of silver, net of by-product credits, at the Ying Mining District in Fiscal 2021, was $6.09 compared to $5.49 in the prior year. The increase was mainly due to the increase of per tonne cash production as discussed above, offset by an increase of $0.16 in by-product credits per ounce of silver. Revenue from lead and zinc was $48.7 million, up $0.5 million, compared to $48.2 million in Fiscal 2020.

In Fiscal 2021, a total of 208,904 metres or $6.9 million worth of diamond drilling were completed at the Ying Mining District (Fiscal 2020 – 85,643 metres or $2.5 million), of which a total of 150,324 metres or $3.2 million worth of underground diamond drilling were expensed as part of mining costs (Fiscal 2020 – 85,643 or $2.5 million) and a total of 58,580 metres or $3.7 million worth of surface drilling were capitalized (Fiscal 2020 – nil). In addition, approximately 22,918 metres or $6.7 million worth of preparation tunnelling were completed and expensed as mining preparation costs (Fiscal 2020 – 19,088 metres or $5.7 million) at the Ying Mining District, and approximately 73,350 metres or $27.4 million worth of horizontal tunnels, raises, ramps and declines were completed and capitalized (Fiscal 2020 – 70,240 metres or $23.9 million).

Q4 Fiscal 2021 vs. Q4 Fiscal 2020

In Q4 Fiscal 2021, a total of 112,561 tonnes of ore were mined and 131,725 tonnes of ore were milled at the Ying Mining District, up 62% and 90%, compared to 69,379 tonnes mined and 69,188 tonnes milled in Q4 Fiscal 2020. The increase was mainly due to an extra month operational shutdown due to COVID-19 in Q4 Fiscal 2020.

Average head grades of ore processed were 280 g/t for silver, 3.9% for lead, and 0.8% for zinc compared to 297 g/t for silver, 4.6% for lead, and 1.0% for zinc in Q4 Fiscal 2020.

Metals sold were approximately 0.9 million ounces of silver, 700 ounces of gold, 9.1 million pounds of lead, and 1.3 million pounds of zinc, up 32%, 40%, 10%, and 51%, respectively, compared to 0.7 million ounces of silver, 500 ounces of gold, 8.3 million pounds of lead, and 0.9 million pounds of zinc in Q4 Fiscal 2020.

In Q4 Fiscal 2021, the cash mining cost at the Ying Mining District was $83.35 per tonne, up 22% compared to $68.10 in Q4 Fiscal 2020. The increase was mainly due to certain fixed overhead costs related to mining operations expensed directly as mine general and administrative expenses during the extra month operational shutdown in Q4 Fiscal 2020. The cash milling cost was $11.23 per tonne, down 3% compared to $11.53 in Q4 Fiscal 2020.


	Management’s Discussion and Analysis	Page 8

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Year Ended March 31, 2021

(Expressed in thousands of U.S. dollars, except per share data or unless otherwise stated)

Correspondingly, the cash production cost per tonne of ore processed at the Ying Mining District in Q4 Fiscal 2021 was $98.13, up 17% compared to $83.59 in Q4 Fiscal 2020. The all-in sustaining cost per tonne of ore processed was $155.14, down 21% compared to $195.78 in Q4 Fiscal 2020. The decrease was mainly due to higher production output resulting in a lower per tonne fixed cost allocation.

In Q4 Fiscal 2021, the cash cost per ounce of silver and all in sustaining cost per ounce of silver, net of by-product credits, at the Ying Mining District were $1.20 and $10.00, respectively, compared to $0.30 and $11.86 in Q4 Fiscal 2020.

In Q4 Fiscal 2021, a total of approximately 40,438 metres or $1.5 million worth of diamond drilling were completed at the Ying Mining District (Q4 Fiscal 2020 – 12,412 metres or $0.4 million), of which approximately 32,551 metres or $0.7 million worth of underground diamond drilling was expensed as part of mining costs (Q4 Fiscal 2020 – 12,412 metres or $0.4 million) and approximately 7,887 metres or $0.8 million worth of surface drilling were capitalized (Q4 Fiscal 2020 – nil). In addition, approximately 5,132 metres or $1.1 million worth of preparation tunnelling were completed and expensed as part of mining costs (Q4 Fiscal 2020 – 1,810 metres or $0.6 million), and approximately 9,414 metres or $4.0 million worth of horizontal tunnels, raises, ramps, and declines were completed and capitalized (Q4 Fiscal 2020 – 7,979 metres or $2.9 million).


	Management’s Discussion and Analysis	Page 9

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Year Ended March 31, 2021

(Expressed in thousands of U.S. dollars, except per share data or unless otherwise stated)


(ii)	*GC Mine*

The following table summarizes the operational information at the GC Mine for the three months and the year ended March 31, 2021 and 2020:


GC Mine				Three months ended March 31,						Year ended March 31,
				2021		2020		Changes		2021		2020		Changes
Production Data
	Mine Data
		Ore Mined (tonne)		50,511		37,216		36	%	314,900		287,633		9	%
		Ore Milled (tonne)		48,949		33,243		47	%	316,179		290,610		9	%

		Head Grades
			Silver (gram/tonne)	87		94		-7	%	85		97		-12	%
			Lead (%)	1.7		1.8		-6	%	1.7		1.9		-11	%
			Zinc (%)	3.3		3.5		-6	%	3.4		3.3		3	%

		Recovery Rates
			Silver (%) *	81.9		80.7		1	%	82.5		77.4		7	%
			Lead (%)	89.7		90.4		-1	%	89.6		89.3		0	%
			Zinc (%)	88.2		87.7		1	%	88.2		86.0		3	%

Cost Data
	+	Mining cost per tonne of ore mined ($)		53.53		35.09		53	%	47.68		46.40		3	%
			Cash mining cost per tonne of ore mined ($)	42.05		25.58		64	%	38.56		38.06		1	%
			Depreciation and amortization charges per tonne of ore mined ($)	11.48		9.51		21	%	9.12		8.34		9	%

	+	Milling cost per tonne of ore milled ($)		18.94		18.50		2	%	14.25		15.52		-8	%
			Cash milling cost per tonne of ore milled ($)	16.51		16.36		1	%	12.88		13.85		-7	%
			Depreciation and amortization charges per tonne of ore milled ($)	2.43		2.14		14	%	1.37		1.67		-18	%

	+	Cash production cost per tonne of ore processed ($)		58.56		41.94		40	%	51.44		51.91		-1	%
	+	All-in sustaining cost per tonne of ore processed ($)		87.69		88.18		-1	%	74.09		69.33		7	%

	+	Cash cost per ounce of Silver, net of by-product credits ($)		(12.80	)	(10.03	)	-28	%	(11.48	)	(7.65	)	-50	%
	+	All-in sustaining cost per ounce of Silver, net of by-product credits ($)		0.52		8.31		-94	%	-		0.77		-100	%

Concentrate inventory
		Lead concentrate (tonne)		167		45		271	%	167		45		271	%
		Zinc concentrate (tonne)		253		90		181	%	253		90		181	%

Sales Data
	Metal Sales
		Silver (in thousands of ounces)		120		89		35	%	705		699		1	%
		Lead (in thousands of pounds)		1,739		1,332		31	%	10,410		10,885		-4	%
		Zinc (in thousands of pounds)		3,274		2,194		49	%	20,946		18,137		15	%

	Revenue
		Silver (in thousands of $)		1,765		866		104	%	9,091		7,255		25	%
		Lead (in thousands of $)		1,399		892		57	%	7,628		8,654		-12	%
		Zinc (in thousands of $)		3,138		1,094		187	%	15,895		10,869		46	%
		Other (in thousands of $)		(24	)	327		-107	%	641		617		4	%
				6,278		3,179		97	%	33,255		27,395		21	%

	Average Selling Price, Net of Value Added Tax and Smelter Charges
		Silver ($ per ounce) **		14.71		9.73		51	%	12.90		10.38		24	%
		Lead ($ per pound)		0.80		0.67		19	%	0.73		0.80		-9	%
		Zinc ($ per pound)		0.96		0.50		92	%	0.76		0.60		27	%

* Silver recovery includes silver recovered in lead concentrate and silver recovered in zinc concentrate.
** Silver in zinc concentrate is subjected to higher smelter and refining charges which lowers the net silver selling price.
+ Alternative Performance (Non-IFRS) measures, see section 12 for reconciliation


	Management’s Discussion and Analysis	Page 10

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Year Ended March 31, 2021

(Expressed in thousands of U.S. dollars, except per share data or unless otherwise stated)

Fiscal 2021 vs. Fiscal 2020

In Fiscal 2021, the total ore mined at the GC Mine was 314,900 tonnes, up 9% compared to 287,633 tonnes in Fiscal 2020. Ore milled was 316,179 tonnes, up 9% compared to 290,610 tonnes in Fiscal 2020.

Average head grades of ore processed at the GC Mine were 85 g/t for silver, 1.7% for lead, and 3.4% for zinc compared to 97 g/t for silver, 1.9% for lead, and 3.3% for zinc in Fiscal 2020. Recovery rates for ore processed at the GC Mine were 82.5% for silver, 89.6% for lead, and 88.2% for zinc, compared to 77.4% for silver, 89.3% for lead, and 86.0% for zinc in Fiscal 2020.

In Fiscal 2021, the GC Mine sold 705 thousand ounces of silver, 10.4 million pounds of lead, and 20.9 million pounds of zinc, compared to 699 thousand ounces of silver, 10.9 million pounds of lead, and 18.1 million pounds of zinc in Fiscal 2020.

The total mining cost and cash mining cost at the GC Mine in Fiscal 2021 were $47.68 and $38.56 per tonne, respectively, a slight increase of 3% and 1%, respectively, compared to $46.40 and $38.06 per tonne in Fiscal 2020. Total milling cost and cash milling cost per tonne at the GC Mine were $14.25 and $12.88, down 8% and 7%, respectively, compared to $15.52 and $13.85 in Fiscal 2020.

Correspondingly, the cash production cost per tonne of ore processed at the GC Mine in Fiscal 2021 was $51.44, down 1% compared to $51.91 in Fiscal 2020. The all-in sustaining production cost per tonne of ore processed was $74.09, up 7%, compared to $69.33 in Fiscal 2020.The increase was mainly due to an increase of $1.8 million in sustaining capital expenditures.

The cash cost per ounce of silver, net of by-product credits, at the GC Mine, was negative $11.48, compared to negative $7.65 in the prior year. The all-in sustaining cost per ounce of silver, net of by-product credits, was $nil compared to $0.77 Fiscal 2020. The improvement was mainly due to an increase of $5.47 in by-product credits per ounce of silver, offset by an increase of 7% in all-in sustaining production cost per tonne of ore processed as discussed above.

In Fiscal 2021, approximately 45,996 metres or $1.8 million worth of underground diamond drilling (Fiscal 2020 – 22,513 metres or $1.0 million) and 11,719 metres or $2.2 million worth of tunnelling (Fiscal 2020 – 19,315 metres or $4.6 million) were completed and expensed as mining preparation costs at the GC Mine. In addition, approximately 11,871 metres or $3.9 million of tunnels, raises, ramps, and declines were completed and capitalized (Fiscal 2020 – 3,327 metres or $2.4 million).

Q4 Fiscal 2021 vs. Q4 Fiscal 2020

In Q4 Fiscal 2021, a total of 50,511 tonnes of ore were mined and 48,949 tonnes were milled at the GC Mine, up 36% and 47%, respectively, compared to 37,216 tonnes mined and 33,243 tonnes milled in Q4 Fiscal 2020. The increase was mainly due to an extra one-month operational shutdown due to COVID-19 in Q4 Fiscal 2020.

Average head grades of ore milled were 87 g/t for silver, 1.7% for lead, and 3.3% for zinc compared to 94 g/t for silver, 1.8% for lead, and 3.5% for zinc in Q4 Fiscal 2020.

Metals sold were approximately 120 thousand ounces of silver, 1.7 million pounds of lead, and 3.3 million pounds of zinc, up 35%, 31%, and 49%, respectively, compared to 89 thousand ounces of silver, 1.3 million pounds of lead, and 2.2 million pounds of zinc in Q4 Fiscal 2020.

The cash mining cost at the GC Mine was $42.05 per tonne, up 64% compared to $25.58 per tonne in Q4 Fiscal 2020. The increase was mainly due to some fixed overhead costs related to mining operations expensed directly as mine general and administration expenses during the extra month’s operational shutdown in Q4 Fiscal 2020. The cash milling cost was $16.51 per tonne, up 1% compared to $16.36 in Q4 Fiscal 2020. Correspondingly, the cash production cost per tonne increased by 40% to $58.56 from $41.94 in Q4 Fiscal 2020. The all-in sustaining production cost per tonne of ore processed was $87.69, down 1%, compared to $88.18 in Q4 Fiscal 2020.

The cash cost per ounce of silver and all-in sustaining cost per ounce of silver, net of by product credits, at the GC Mine, in Q4 Fiscal 2021, were negative $12.80 and $0.52, respectively, compared to negative $10.03 and


	Management’s Discussion and Analysis	Page 11

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Year Ended March 31, 2021

(Expressed in thousands of U.S. dollars, except per share data or unless otherwise stated)

$8.31 in Q4 Fiscal 2020. The improvement was mainly due to an increase of $11.62 in by-product credits per ounce of silver, offset by the increase in cash production cost and all-in production cost per tonne of ore processed as discussed above. Revenue from lead and zinc was $4.5 million, up $2.5 million, compared to $2.0 million in Q4 Fiscal 2020.

In Q4 Fiscal 2021, approximately 9,021 metres or $0.2 million worth of underground diamond drilling (Q4 Fiscal 2020 – 2,200 metres or $0.1 million) and 1,883 metres or $0.4 million of tunnelling (Q4 Fiscal 2020 – 353 metres or $0.1 million) were completed and expensed as mining preparation costs at the GC Mine. In addition, approximately 1,389 metres or $0.6 million of horizontal tunnels, raises, and declines were completed and capitalized (Q4 Fiscal 2020 – 1,851 metres or $1.4 million).


(iii)	*BYP Mine*

The BYP Mine was placed on care and maintenance in August 2014 due to required capital upgrades to sustain its ongoing production and the market environment. In Fiscal 2021, the Company sold all remaining gold concentrate inventories, containing approximately 1,200 ounces of gold, that had been produced by the mine before it was placed on care and maintenance.

The Company is carrying out activities to apply for a new mining license, but the process has taken longer than expected. No guarantee can be given that the new mining license for the BYP Mine will be issued, or if it is issued, that it will be issued under reasonable operational and/or financial terms, or in a timely manner, or that the Company will be in a position to comply with all conditions that are imposed.


(c)	Comparison of Fiscal 2021 Results with Fiscal 2021 Guidance


(i)	Production and Production Costs

The following table sets out the actual annual ore processed, metal production, cash production cost, and all-in sustaining production costs in Fiscal 2021 compared to the Fiscal 2021 production guidance provided in February 2020:

Head grades

Metal production

Production costs

Ore processed

Silver

Lead

Zinc

Silver

Lead

Zinc

Cash cost

AISC

(tonnes)

(g/t)

(%)

(Koz)

(Klbs)

($/t)

Fiscal 2021 Actual Results

Ying Mining District

651,402

290

4.3

0.8

5,615

57,886

6,916

83.01

132.54

GC Mine

316,179

1.7

3.4

716

10,544

21,096

51.44

74.09

Consolidated

967,581

223

3.4

1.7

6,330

68,430

28,013

72.71

128.20

Fiscal 2021 Guidance

Ying Mining District

640,000 - 660,000

292

4.3

0.9

5,600-5,800

56,600-58,000

7,000-8,000

74.7-82.5

133.5 - 140.5

GC Mine

290,000 - 310,000

1.7

3.3

600-700

9,500-10,500

17,500-18,700

52.2-57.5

78.5 - 82.9

Consolidated

930,000 - 970,000

229-231

3.5-3.5

1.6-1.7

6,200-6,500

66,100-68,500

24,500-26,700

66.6-73.6

122.6-135.5

On consolidated basis, ore processed and silver and lead production were in line with the annual guidance while zinc production was above the high end of the annual guidance. The cash production cost and all-in sustaining production cost per tonne of ore processed were also in line with the annual guidance.

At the Ying Mining District, ore processed and silver and lead production were in line with the annual guidance, while zinc production was 1% below 7.0 million pounds, the low end of the annual guidance. The all-in sustaining production cost per tonne of ore processed was 1% below the low end of the annual guidance, while the per tonne cash production cost was 1% above $82.5, the high end of the annual guidance.

At the GC Mine, silver, lead and zinc production were all above the high end of the annual guidance by 2%, 1% and 13%, respectively, as the ore processed was 2% above the high end of the annual guidance and the zinc head grade was better than the forecast. The per tonne cash production cost and all-in sustaining production cost were 1% and 6%, respectively, below the low end of the annual guidance.


(ii)	Development and Capital Expenditures

The following table summarizes the development work and capitalized expenditures in Fiscal 2021 compared to


	Management’s Discussion and Analysis	Page 12

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Year Ended March 31, 2021

(Expressed in thousands of U.S. dollars, except per share data or unless otherwise stated)

the Fiscal 2021 Guidance.


	Capitalized Development and Expenditures
				Exploration and			Surface Exploration			Equipment &		Total
	Ramp Development			Development Tunnels			Drilling			Facilities
	(Metres)		($ Thousand)	(Metres)	($ Thousand)		(Metres)		($ Thousand)	($ Thousand)		(Metres)		($ Thousand)
Fiscal 2021 Actual Results
Ying Mining District	9,060	$	5,752	64,290	$	21,701	58,580	$	3,685	$	5,426	73,350	$	36,564
GC Mine	1,086		816	10,785		3,074	-		-		689	11,871		4,579
Corporate + other	-			-		117	-		-		4,296	-		4,413
Consolidated	10,146	$	6,568	75,075	$	24,892	58,580	$	3,685	$	10,411	85,221	$	45,556

Fiscal 2021 Guidance
Ying Mining District	6,700	$	5,500	81,300	$	26,900	-	$	-	$	4,600	88,000	$	37,000
GC Mine	1,600		1,400	11,000		3,200	-		-		800	12,600		5,400
Consolidated	8,300	$	6,900	92,300	$	30,100	-	$	-	$	5,400	100,600	$	42,400

On a consolidated basis, the Company incurred a total of $45.6 million in capital expenditures in Fiscal 2021, approximately $3.2 million above the annual guidance, driven primarily by $4.0 million, item that was not included in the annual guidance, to construct a 1,000,000 tonne per year aggregate plant, to crush and recycle the waste rock from the Ying Mining District.

Capital expenditures at the Ying Mining District and GC Mine were below the annual guidance. In Fiscal 2021, the Company commenced extensive drilling programs at the Ying Mining District with two main objectives: i) areas with existing development and access are being re-examined to potentially define additional resources and reserves, which led to a reduction of 17,010 metres or $5.0 million worth of exploration and development tunneling in Fiscal 2021, and ii) areas which may have been overlooked for potential gold mineralization are being tested for different alteration styles from the typical silver-lead zones.


(d)	La Yesca Acquisition

In December 2020, the Company and its subsidiary, New Infini Silver Inc. (“New Infini”), entered into a framework agreement (the “Agreement”) with various arm’s length vendors (the “Vendors”), whereby New Infini agreed to acquire a 100% interest in the La Yesca silver project (“La Yesca”) through the indirect purchase of all of the issued and outstanding shares of Infini Resources, S.A. de C.V., a Mexican company which owns La Yesca.

La Yesca is a silver-polymetallic, epithermal-type project located approximately 100 kilometres (“km”) (185 km by road) northwest of Guadalajara, the second-largest city in Mexico. The concessions comprising La Yesca cover an area of approximately 47.7 km². In total, 7,649 metres from 25 drill holes have previously been completed, all of which intersected mineralization.

Agreement details are summarized as follows:

In December 2020, Silvercorp’s 100%-owned subsidiary, New Infini, acquired a 100% interest in Infini SA, a Mexican corporation which holds a 100% interest in the La Yesca project, for a $9.25 million cash payment and a 45% interest in New Infini shares to the Vendors;
Of the cash payment of $9.25 million, Silvercorp provided $7.57 million and a group of Silvercorp’s directors, officers, employees, and consultants (the “Management Team”) provided $1.68 million in return for their interests of 45% and 10%, respectively, in New Infini;
Through New Infini, Silvercorp assumed management and control of Infini SA, and became the operator of La Yesca;
Upon closing of the Agreement, New Infini paid $8.25 million and issued 45% in New Infini shares to the Vendors;
Within 90 days of closing of the Agreement, New Infini would make a second cash payment of $1.0 million, less any liabilities, as contemplated under the Agreement; and
A “Discovery Payment” of up to $30.0 million, calculated on the basis of $0.20 per ounce of silver


	Management’s Discussion and Analysis	Page 13

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Year Ended March 31, 2021

(Expressed in thousands of U.S. dollars, except per share data or unless otherwise stated)

resources as defined by National Instrument 43-101 Standards of Disclosure for Mineral Projects, paid by New Infini to the Vendors, subject to certain permitting considerations.

In January 2021, New Infini completed a private placement and raised $4.0 million by issuing 8,000,000 shares of New Infini at $0.50 per share The Company purchased an additional 3,000,000 shares for $1.5 million. As at March 31, 2021, New Infini had a total of 48,000,000 shares issued and outstanding, of which the Company owned 21,000,000 shares or 43.75%, the Vendors owned 18,600,000 shares or 38.75%, and the Management Team had 8,400,000 shares or 17.5%.


(e)	Zhonghe Silver Project Acquisition

On December 17, 2020, the Company, through its subsidiary, Henan Found, won an online auction to acquire the exploration rights to the Zhonghe Silver Project (the “Zhonghe Project”) from the Henan provincial government. The Zhonghe Project covers an area of 4.96 square km, approximately 50 km (75 km by road) northeast of the Company’s Ying Mining District, also located in Luoning County. The final winning bid submitted by the Company was approximately $76.0 million (RMB¥495.0 million) (the “Purchase Price”).

Based on the current regulations, 20% of the Purchase Price, approximately $15.2 million, is required to be paid upon the execution of a formal mineral rights transfer contract (the “Transfer Contract”) with the Department of Natural Resources of Henan Province. The balance of the Purchase Price is due only if the exploration rights to the Zhonghe Project are converted into a mining license and shall be paid annually over the duration of the term of the mining license.

The execution of the Transfer Contract is pending the national security clearance by the relevant Chinese authorities.


5.	Fiscal 2022 Operating Outlook

The Company reiterates its Fiscal 2022 production guidance previously announced in the Company’s news release dated February 05, 2021.


(a)	Production and Cash Cost Guidance

The Company continues to expect production of approximately 960,000 – 1,010,000 tonnes of ore, yielding 6.4 million to 6.7 million ounces of silver, 65.7 million to 68.9 million pounds of lead, and 26.9 million to 28.5 million pounds of zinc. Fiscal 2022 production guidance represents an anticipated increase of approximately 3% in silver production, and 7% to 10% in zinc production compared to the Fiscal 2021 guidance. In Fiscal 2022, lead production is expected to be similar to the current Fiscal 2021 guidance.

The following summarizes the Company’s production and cash cost guidance for Fiscal 2022.

Head grades

Metal production

Production costs

Ore processed

Silver

Lead

Zinc

Silver

Lead

Zinc

Cash cost*

AISC*

(tonnes)

(g/t)

(%)

(Moz)

(Mlbs)

($/t)

Ying Mining District

670,000-700,000

284

4.2

0.9

5.7 - 5.9

57.2 - 59.8

7.8 - 8.1

87.1 - 91.7

134.2 - 141.2

GC Mine

290,000-310,000

1.5

3.6

0.6 - 0.7

8.5 - 9.1

19.1 - 20.4

55.7 - 59.6

81.3 - 85.6

Consolidated

960,000-1,010,000

223

3.3

1.7

6.3 - 6.6

65.7 - 68.9

26.9 - 28.5

77.7 - 82.6

130.7 - 141.7

*Both AISC and cash costs are non-IFRS measures. AISC refers to all-in sustaining costs per tonne of ore processed. Cash costs refer to cash production costs per tonne of ore processed. Foreign exchange rates assumptions used are: US$1 = CAD$1.30, US$1 = RMB¥6.50.


(b)	Development and Capital Expenditures

In Fiscal 2022, the total capital expenditures at the Ying Mining District and the GC Mine are estimated at $38.2 million, including plans to i) complete 6,600 metres of ramp development tunneling at estimated capitalized expenditures of $5.6 million; ii) complete 62,500 metres of exploration and other development tunneling at estimated capitalized expenditures of $21.8 million, iii) complete 50,000 metres of surface diamond drilling at estimated capital expenditures of $3.5 million, and iv) spend $7.3 million on equipment and facilities. The Company also plans to complete and expense 33,600 metres of mining preparation tunneling and 206,900 metres of underground diamond drilling. The table below summarizes the work plan and estimated capital expenditures at the Ying Mining District and the GC Mine for Fiscal 2022.


	Management’s Discussion and Analysis	Page 14

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Year Ended March 31, 2021

(Expressed in thousands of U.S. dollars, except per share data or unless otherwise stated)

Capitalized Development Work and Expenditures

Expensed

Mining

Exploration and

Surface Exploration

Equipment

Preparation

Underground

Ramp Development

Development Tunnels

Drilling

& Facilities

Total

Tunnnels

driling

(Metres)

($ Million)

(Metres)

($ Million)

(Metres)

($ Million)

(Metres)

Ying Mining District

6,100

5.2

52,200

18.8

50,000

3.5

6.3

33.8

23,400

148,400

GC Mine

500

0.4

10,300

3.0

1.0

4.4

10,200

58,500

Total

6,600

5.6

62,500

21.8

50,000

3.5

7.3

38.2

33,600

206,900


(c)	Other Development Plans

In Fiscal 2022, the Company plans to commence a Phase I 10,000 metre drilling program at the Las Yesca Silver Project at an estimated cost of $3.3 million. The Company has applied for the necessary drilling permits from the respective Mexican government agencies and is awaiting approval.

The Company plans to initiate an extensive drilling campaign at the Zhonghe Project. The Company will formalize the plan and provide an update on the cost estimates with respect to the Zhonghe Project once the mineral rights transfer contract is executed.

The Company is in the process of applying for permits to build a third tailings facility near the existing tailings facilities at the Ying Mining District. The Company is also considering plans to expand the current milling capacity or build a new mill for future production expansion at the Ying Mining District. There is potential to consolidate mineral properties near the Ying Mining District, and to process ore from Zhonghe Project during its development stage. The Company will provide further updates when plans and cost estimates are formalized.


6.	Investment in Associates


(a)	New Pacific Metals Corp. (“NUAG”)

NUAG is a Canadian public company listed on the TSX Exchange (symbol: NUAG). NUAG is a related party of the Company by way of two common directors and one officer, and the Company accounts for its investment in NUAG using the equity method as it is able to exercise significant influence over the financial and operating policies of NUAG.

On June 9, 2020, the Company participated in an underwritten offering of common shares of NUAG and acquired an additional 1,320,710 common shares of NUAG for a cost of $5.8 million.

On July 22, 2020, NUAG announced the spin-out by way of a plan of arrangement (the “Arrangement”) of its then wholly-owned subsidiary, WHG, which owns 100% owned of the Skukum Gold Project (formerly “Tagish Lake Gold Project”) located in Yukon, Canada. Upon completion of the Arrangement on November 18, 2020, NUAG and WHG became two separate entities, and NUAG distributed all of the WHG common shares held by NUAG to its shareholders on a pro rata basis. WHG common shares were listed on the TSX Venture Exchange.

As at March 31, 2021, the Company owned 43,917,216 common shares of NUAG (March 31, 2020 – 42,596,506), representing an ownership interest of 28.6% (March 31, 2020 – 28.8%). The summary of the investment in NUAG common shares and its market value as at the respective balance sheet dates are as follows:


	Management’s Discussion and Analysis	Page 15

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Year Ended March 31, 2021

(Expressed in thousands of U.S. dollars, except per share data or unless otherwise stated)


						Value of NUAG's
	Number of				common shares per
	shares		Amount		quoted market price
Balance April 1, 2019	39,346,300	$	38,703		$	69,783
Purchase from open market	502,600		861
Exercise of warrants	1,500,000		2,349
Participation in public offering	1,247,606		3,820
Share of net loss			(1,276	)
Share of other comprehensive income			1,077
Dilution gain			723
Disposal of common shares held by the associate			1,127
Foreign exchange impact			(2,829	)
Balance March 31, 2020	42,596,506	$	44,555		$	148,624
Participation in public offering	1,320,710		5,805
WHG Spin-out			(1,793	)
Share of net loss			(1,672	)
Share of other comprehensive loss			(2,324	)
Foreign exchange impact			5,828
Balance March 31, 2021	43,917,216	$	50,399		$	181,257

Summarized financial information of NUAG is as follows:

			Years ended March 31,
			2021	⁽¹⁾		2020	⁽¹⁾
Income from investments		$	1,278		$	494
General and administrative expense			(5,836	)		(3,824	)
Gain on disposal of PPE			(2	)		-
Foreign exchange gain			(1,281	)		669
Impairment reversal			8,862			(586	)
Net loss of associate		$	3,021		$	(3,247	)
Adjustments to net loss of associate			(8,862	)		(1,170	)
Net loss of associate qualified for pick-up		$	(5,841	)	$	(4,417	)
Company's share of net loss		$	(1,672	)	$	(1,276	)
⁽¹⁾NUAG's fiscal year-end is on June 30. NUAG's quarterly financial results were used to compile the financial information that matched with the Company's year-end on March 31.




As at			March 31, 2021			March 31, 2020
Current assets		$	48,511		$	29,012
Non-current assets			78,164			74,989
Total assets		$	126,675		$	104,001

Current liabilities			811			1,409
Total liabilities		$	811		$	1,409

Net assets		$	125,864		$	102,592
Company's share of net assets of associate		$	35,932		$	29,575


	Management’s Discussion and Analysis	Page 16

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Year Ended March 31, 2021

(Expressed in thousands of U.S. dollars, except per share data or unless otherwise stated)


(b)	Investment in Whitehorse Gold Corp. (“WHG”)

As at March 31, 2021, the Company owned 11,514,286 common shares of WHG (March 31, 2020 – nil), representing an ownership interest of 26.99% (March 31, 2020 – nil). The summary of the investment in WHG common shares and its market value as at the respective balance sheet dates are as follows:


						Value of WHG's
	Number of					common shares per
	shares		Amount			quoted market price
Balance April 1, 2020
Distributed under WHG spin-out	5,740,285		1,793
Participation in private placement	5,774,000		1,326
Share of other net loss			(174	)
Foreign exchange impact			113
Balance March 31, 2021	11,514,285	$	3,058		$	15,108

Summarized financial information of WHG is as follows:


		Year ended March 31,2021 ⁽¹⁾
General and administrative expense	$	(825	)
Other expense		(31	)
Net loss of associate	$	(856	)
Adjustments to net loss of associate		211
Net loss of associate qualified for pick-up	$	(645	)
Company's share of net loss	$	(174	)

⁽¹⁾WHG's fiscal year-end is on December 31. WHG's quarterly financial results were used to compile the financial information that matched with the Company's year-end on March 31.


As at		March 31, 2021
Current assets	$	823
Non-current assets		10,862
Total assets	$	11,685

Current liabilities		237
Total liabilities	$	237

Net assets	$	11,448
Company's share of net assets of associate	$	3,090

Subsequent to March 31, 2021, the Company participated in a brokered offering of WHG and purchased 4,000,000 units at the cost of $5.0 million (CAD$6.0 million). Each unit consists of one WHG common share and one common share purchase warrant with an exercise price of CAD$2.00 per share which expires on May 14,2026.


	Management’s Discussion and Analysis	Page 17

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Year Ended March 31, 2021

(Expressed in thousands of U.S. dollars, except per share data or unless otherwise stated)


7.	Overview of Financial Results


(a)	Selected Annual and Quarterly Information

The following tables set out selected quarterly results for the past twelve quarters as well as selected annual results for the past three years. The dominant factors affecting results presented below are the volatility of the realized selling metal prices and the timing of sales. The results for quarters ended March 31 are normally affected by the extended Chinese New Year holiday, and during the quarter ended March 31, 2020, the operations in China were shut down for an extra month due to COVID-19.


Fiscal 2021	Quarter Ended													Year Ended
(In thousands of USD, other than per share amounts)		Jun 30, 2020			Sep 30, 2020			Dec 31, 2020			Mar 31, 2021			Mar 31, 2021
Revenue	$	46,705		$	56,372		$	53,296		$	35,732		$	192,105
Cost of mine operations	$	27,420		$	29,700		$	28,495			22,328			107,943
Income from mine operations		19,285			26,672			24,801			13,404			84,162
Corporate general and administrative expenses		2,687			2,784			3,525			3,369			12,365
Foreign exchange loss		2,670			1,349			2,954			773			7,746
Share of loss in associates		161			319			550			816			1,846
Loss (gain) on equity investments		(5,466	)		(2,771	)		(600	)		1,105			(7,732	)
Other items		(3,841	)		214			(258	)		2,098			(1,787	)
Income from operations		23,074			24,777			18,630			5,243			71,724
Finance items		(800	)		(657	)		295			(617	)		(1,779	)
Income tax expenses (recovery)		5,382			5,877			6,046			(4,311	)		12,994
Net income		18,492			19,557			12,289			10,171			60,509
Net income attributable to equity holders of the Company		15,491			15,472			8,392			7,021			46,376
Basic earnings per share		0.09			0.09			0.05			0.04			0.27
Diluted earnings per share		0.09			0.09			0.05			0.04			0.26
Cash dividend declared		2,178			-			2,190			-			4,368
Cash dividend declared per share		0.0125			-			0.0125			-			0.025
Other financial information
Total assets														652,642
Total liabilities														86,914
Total attributable shareholders' equity														467,574


	Management’s Discussion and Analysis	Page 18

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Year Ended March 31, 2021

(Expressed in thousands of U.S. dollars, except per share data or unless otherwise stated)


Fiscal 2020	Quarter Ended													Year Ended
(In thousands of USD, other than per share amounts)		Jun 30, 2019			Sep 30, 2019			Dec 31, 2019			Mar 31, 2020			Mar 31, 2020
Revenue	$	45,576		$	49,886		$	44,508		$	18,859		$	158,829
Cost of mine operations		27,843			27,219			28,738			15,655			99,455
Income from mine operations		17,733			22,667			15,770			3,204			59,374
Corporate general and administrative		2,353			2,583			2,568			2,590			10,094
Foreign exchange loss (gain)		854			(797	)		1,277			(5,437	)		(4,103	)
Share of loss in associates		281			244			322			429			1,276
Dilution gain on investment in associate		(723	)		-			-			-			(723	)
Gain on disposal of mineral rights and properties		(1,477	)		-			-			-			(1,477	)
Gain on equity investments		-			-			-			-			-
Other items		386			519			160			1,080			2,145
Income from operations		16,059			20,118			11,443			4,542			52,162
Finance items		(754	)		(682	)		(988	)		474			(1,950	)
Income tax expenses (recovery)		(488	)		5,139			3,715			543			8,909
Net income		17,301			15,661			8,716			3,525			45,203
Net income attributable to equity holders of the Company		12,607			12,221			6,283			3,163			34,274
Basic earnings per share		0.07			0.07			0.04			0.02			0.20
Diluted earnings per share		0.07			0.07			0.04			0.02			0.20
Cash dividend declared		2,125			-			2,162			-			4,287
Cash dividend declared per share		0.0125			-			0.0125			-			0.025
Other financial information
Total assets														512,760
Total liabilities														73,788
Total attributable shareholders' equity														368,682

Fiscal 2019	Quarter Ended													Year Ended
(In thousands of USD, other than per share amounts)		Jun 30, 2018			Sep 30, 2018			Dec 31, 2018			Mar 31, 2019			Mar 31, 2019
Revenue	$	45,125		$	48,091		$	42,351		$	34,952		$	170,519
Cost of mine operations*		23,206			28,606			26,384			21,390			99,586
Income from mine operations*		21,919			19,485			15,967			13,562			70,933
Corporate general and administrative*		2,342			2,157			2,628			2,623			9,750
Foreign exchange loss (gain)		(788	)		708			(2,315	)		1,034			(1,361	)
Share of loss (income) in associates		279			105			(172	)		118			330
Impairment reversal		-			-			-			(9,178	)		(9,178	)
Other items		73			337			654			254			1,318
Income from operations		20,013			16,178			15,172			18,711			70,074
Finance items		(662	)		(662	)		(815	)		(706	)		(2,845	)
Income tax expenses (recovery)		6,498			5,763			5,134			3,477			20,872
Net income		14,177			11,077			10,853			15,940			52,047
Net income attributable to equity holders of the Company		10,920			8,037			8,660			12,107			39,724
Basic earnings per share		0.07			0.05			0.05			0.07			0.24
Diluted earnings per share		0.06			0.05			0.05			0.07			0.23
Cash dividend declared		2,096			-			2,112			-			4,208
Cash dividend declared per share		0.013			-			0.013			-			0.025
Other financial information
Total assets														499,076
Total liabilities														85,895
Total attributable shareholders' equity														374,446

*Certain financial information was reclassified to conform with the current period’s presentation. The reclassification has no impact on the Company’s financial position and financial performance.


(b)	Overview of Annual Financial Results


	Management’s Discussion and Analysis	Page 19

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Year Ended March 31, 2021

(Expressed in thousands of U.S. dollars, except per share data or unless otherwise stated)

Revenue in Fiscal 2021 was $192.1 million, up 21% or $33.3 million compared to $158.8 million in Fiscal 2020. The increase was mainly due to i) an increase of $5.9 million arising from the increase in the quantities of metal sold; ii) an increase of $30.2 million arising from the increase in the realized selling price for silver, gold, and zinc; offset by iii) a decrease of $2.8 million arising from the decrease in the realized selling price for lead. Revenues from silver, gold, and base metal were $111.2 million, $6.7 million, and $74.2 million, respectively, up 31%, 72%, and 6%, respectively, compared to $84.9 million, $3.9 million, and $70.0 million in Fiscal 2020. Revenue from the Ying Mining District was $157.3 million, up 20%, compared to $131.4 million in Fiscal 2020. Revenue from the GC Mine was $33.3 million, up 21%, compared to $27.4 million in Fiscal 2020.

Fluctuation in sales revenue is mainly dependent on metal sales and realized metal prices. The net realized selling price is calculated using the Shanghai Metal Exchange (“SME”) price, less smelter charges, recovery, and value added tax (“VAT”). The metal prices quoted on SME, excluding gold, include VAT. The following table is a comparison among the Company’s net realized prices, prices quoted on SME, and prices quoted on London Metal Exchange (“LME”):


		Silver (in US$/ounce)				Gold (in US$/ounce)				Lead (in US$/pound)				Zinc (in US$/pound)
		F2021		F2020		F2021		F2020		F2021		F2020		F2021		F2020
Net realized selling prices	$	17.61	$	13.56	$	1,430	$	1,185	$	0.75	$	0.80	$	0.78	$	0.62
SME	$	22.93	$	17.64	$	1,800	$	1,472	$	1.00	$	1.04	$	1.29	$	1.23
LME	$	22.92	$	16.53	$	1,825	$	1,468	$	0.86	$	0.88	$	1.11	$	1.09

Cost of mine operations in Fiscal 2021 was $107.9 million, up 9% compared to $99.5 million in Fiscal 2020. Items included in cost of mine operations are as follows:


		Fiscal 2021		Fiscal 2020	Change
Production costs	$	69,544	$	62,029	12	%
Depreciation and amortization		21,434		20,715	3	%
Mineral resource taxes		5,004		4,540	10	%
Government fees and other taxes		2,374		2,115	12	%
General and administrative		9,587		10,056	-5	%
	$	107,943	$	99,455	9	%

Production costs expensed in Fiscal 2021 were $69.5 million, up 12% compared to $62.0 million in Fiscal 2020. The increase was mainly due to the increases in the quantities of metal sold and per tonne production costs. The production costs expensed represent approximately 956,000 tonnes of ore processed and expensed at a cost of $72.71 per tonne, compared to approximately 900,000 tonnes at $68.91 per tonne in Fiscal 2020.

The increases in the mineral resource taxes and government fee and other taxes were mainly due to higher revenue achieved in Fiscal 2021. Government fees and other taxes are comprised of environmental protection fees, surtaxes on VAT, land usage levies, stamp duties and other miscellaneous levies, duties and taxes imposed by the state and local Chinese governments.


	Management’s Discussion and Analysis	Page 20

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Year Ended March 31, 2021

(Expressed in thousands of U.S. dollars, except per share data or unless otherwise stated)

Mine general and administrative expenses in Fiscal 2021 were $9.6 million, down 5% compared to $10.0 million in Fiscal 2020. The decrease was mainly due to certain fixed overhead costs related to mining operations expensed as mine general and administrative expenses during the extra month operational shutdown in Q4 Fiscal 2020. Items included in mine general and administrative expenses are as follows:


		Fiscal 2021		Fiscal 2020	Change
Amortization and depreciation	$	1,255	$	1,511	-17	%
Office and administrative expenses		2,897		2,881	1	%
Professional Fees		442		481	-8	%
Salaries and benefits		4,993		5,183	-4	%
	$	9,587	$	10,056	-5	%

Corporate general and administrative expenses in Fiscal 2021 were $12.4 million, up 22% or $2.3 million, compared to $10.1 million in Fiscal 2020. Items included in corporate general and administrative expenses are as follows:


		Fiscal 2021		Fiscal 2020	Change
Amortization and depreciation	$	533	$	447	19	%
Office and administrative expenses		1,946		2,304	-16	%
Professional Fees		783		562	39	%
Salaries and benefits		4,947		4,245	17	%
Share-based compensation		4,156		2,536	64	%
	$	12,365	$	10,094	22	%

The increase in salaries and benefits was mainly due to the increase in manpower and the premiums of the provincial medical service plan in the Province of British Columbia, which switched to a percentage of salaries from a fixed amount. The increase in non-cash share-based compensation was mainly due to additional share awards with higher share prices at the dates granted in Fiscal 2021.

Property evaluation and business development expenses in Fiscal 2021 was a recovery of $3.2 million, compared to an expense of $0.7 million in Fiscal 2020. On April 26, 2020, the Company entered into a definitive agreement with Guyana Goldfields Inc. (“Guyana Goldfields”), subsequently amended on May 16, 2020 (collectively, the “Arrangement Agreement”) to acquire all of the issued and outstanding shares of Guyana Goldfields. On June 10, 2020, Guyana Goldfields terminated the Arrangement Agreement and paid the Company a break fee of $6.5 million (CAD$9.0 million). Net of expenses of $2.5 million, a gain of $4.0 million on this transaction was recorded as a recovery of property evaluation and business development expenses.

Foreign exchange loss in Fiscal 2021 was $7.7 million compared to a gain of $4.1 million in Fiscal 2020. The foreign exchange gain or loss is mainly driven by the exchange rate between the US dollar and the Canadian dollar.

Loss on disposal of plant and equipment in Fiscal 2021 was $0.3 million compared to $0.5 million in Fiscal 2020. The loss was related to the disposal of obsolete equipment.

Share of loss in an associate in Fiscal 2021 was $1.8 million, compared to $1.3 million in Fiscal 2020. Share of loss in an associate represents the Company’s equity pickup in NUAG and WHG.

Gain on equity investment in Fiscal 2021 was $7.7 million, compared to $nil in Fiscal 2020. A total gain of $20.3 million on equity investments was reported in Fiscal 2021 (Fiscal 2020 - $0.2 million), of which $7.7 million was recorded in profit (Fiscal 2020 - $nil) and $12.5 million was recorded in other comprehensive income (Fiscal 2020


	Management’s Discussion and Analysis	Page 21

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Year Ended March 31, 2021

(Expressed in thousands of U.S. dollars, except per share data or unless otherwise stated)

- $0.2 million) as the Company made elections to account for equity investments on an instrument-by-instrument basis.

Finance income in Fiscal 2021 was $3.8 million compared to $4.0 million in Fiscal 2020. The Company invests in short-term investments which include term deposits, money market instrument, and bonds.

Finance costs in Fiscal 2021 were $2.0 million compared to $2.1 million in Fiscal 2020. Items included in finance costs are summarized below:


		Fiscal 2021		Fiscal 2020
Interest on bank loan	$	-	$	45
Interest on lease obligation		95		112
Expected credit loss of bonds		1,376		-
Loss on disposal of bonds		266		1,494
Unwinding of discount of environmental rehabilitation provision		251		422
	$	1,988	$	2,073

Income tax expenses in Fiscal 2021 were $13.0 million, up $4.1 million compared to $8.9 million in Fiscal 2020. The increase was mainly due to higher income from mine operations achieved in Fiscal 2021. The income tax expense recorded in Fiscal 2021 included a current income tax expense of $10.9 million (Fiscal 2020 - $5.6 million) and a deferred income tax expense of $2.1 million (Fiscal 2020 - $3.3 million). The current income tax included $1.2 million of withholding tax (Fiscal 2020 - $2.8 million), which was paid at a rate of 10% on dividends and interest distributed out of China.


(c)	Overview of Fourth Quarter Financial Results

Net income attributable to equity shareholders of the Company in Q4 Fiscal 2021 was $7.0 million, or $0.04 per share, up 122% or $3.9 million, compared to $3.2 million, or $0.02 per share in Q4 Fiscal 2020.

Revenue in Q4 Fiscal 2021 was $35.7 million, up 89% or $16.8 million, compared to $18.9 million in Q4 Fiscal 2020. The increase was mainly due to i) an increase of $7.7 million arising from the increase in the quantities of metal sold; ii) an increase of $9.1 million arising from the increase in the realized selling prices. Revenue from silver, gold, and base metal was $21.2 million, 1.0 million, and $13.5 million, up 116%, 61%, and 61%, respectively, compared to $9.8 million, $0.6 million, and $8.4 million in Fiscal 2020. Revenue from the Ying Mining District was $29.5 million, up 88%, compared to $15.7 million in Q4 Fiscal 2020. Revenue from the GC Mine was $6.3 million, up 97%, compared to $3.2 million in Fiscal 2020.

Cost of mine operations in Q4 Fiscal 2021 was $22.3 million, up 43% compared to $15.7 million in Fiscal 2020.

Items included in cost of mine operations are as follows:


		Q4 Fiscal 2021		Q4 Fiscal 2020	Change
Production costs	$	14,084	$	8,344	69	%
Depreciation and amortization		4,507		3,146	43	%
Mineral resource taxes		898		559	61	%
Government fees and other taxes		409		238	72	%
General and administrative		2,431		3,368	-28	%
	$	22,329	$	15,655	43	%

Production costs expensed in Q4 Fiscal 2021 were $14.1 million, up 69% compared to $8.3 million in Q4 Fiscal 2020. The increase was mainly due to the increases in the quantities of metal sold and per tonne production costs. The production costs expensed in Q4 Fiscal 2021 represents approximately 164,000 tonnes of ore


	Management’s Discussion and Analysis	Page 22

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Year Ended March 31, 2021

(Expressed in thousands of U.S. dollars, except per share data or unless otherwise stated)

processed and expensed at a cost of $85.97 per tonne, compared to 121,000 tonnes at a cost of $68.93 per tonne in Q4 Fiscal 2020.

The increases in the mineral resource taxes and government fee and other taxes were mainly due to higher revenue achieved in Q4 Fiscal 2021, and the decrease in the mine general and administrative expenses were mainly due to certain fixed overhead costs related to mining operations expensed directly as mine general and administrative expenses during the extra month operational shutdown in Q4 Fiscal 2020. Items included in mine general and administrative expenses are as follows:


		Q4 Fiscal 2021		Q4 Fiscal 2020	Change
Amortization and depreciation	$	333	$	713	-53	%
Office and administrative expenses		670		816	-18	%
Professional Fees		97		69	41	%
Salaries and benefits		1,331		1,770	-25	%
	$	2,431	$	3,368	-28	%

Income from mine operations in Q4 Fiscal 2021 was $13.4 million, up 319% compared to $3.2 million or 17% of revenue in Q4 Fiscal 2020. Income from mine operations at the Ying Mining District was $11.8 million or 40% of revenue, compared to $3.0 million or 19% of revenue in Fiscal 2020. Income from mine operations at the GC Mine was $1.6 million or 25% of revenue, compared to $0.2 million or 6% of revenue in Fiscal 2020.

Corporate general and administrative expenses in Q4 Fiscal 2021 were $3.4 million, up 30% or $0.8 million, compared to $2.6 million in Q4 Fiscal 2020. Items included in general and administrative expenses are as follows:


		Q4 Fiscal 2021		Q4 Fiscal 2020	Change
Amortization and depreciation	$	142	$	122	16	%
Office and administrative expenses		387		517	-25	%
Professional Fees		222		229	-3	%
Salaries and benefits		1,373		1,011	36	%
Share-based compensation		1,245		711	75	%
	$	3,369	$	2,590	30	%

Property evaluation and business development expenses in Q4 Fiscal 2021 were $0.2 million, compared to $0.3 million in Q4 Fiscal 2020.

Foreign exchange loss in Q4 Fiscal 2021 was $0.8 million, compared to a gain of $5.4 million in Q4 Fiscal 2020. The foreign exchange gain or loss is mainly driven by the exchange rate between the US dollar and the Canadian dollar.

Share of loss in an associate in Q4 Fiscal 2021 was $0.8 million (Q4 Fiscal 2020 - $0.4 million), representing the Company’s equity pickup in NUAG and WHG.

Loss on equity investment in Q4 Fiscal 2021 was $1.1 million, compared to $nil in Q4 Fiscal 2020. A total loss of $1.4 million on equity investment was recorded in Q4 Fiscal 2021 (Q4 Fiscal 2020 - $2.5 million), of which $1.1 million was reported in loss (Q4 Fiscal 2020 - $nil), and $0.3 million reported in comprehensive loss (Q4 Fiscal 2020 - $2.5 million).

Finance income in Q4 Fiscal 2021 was $1.0 million compared to $1.2 million in Q4 Fiscal 2020.


	Management’s Discussion and Analysis	Page 23

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Year Ended March 31, 2021

(Expressed in thousands of U.S. dollars, except per share data or unless otherwise stated)

Finance costs in Q4 Fiscal 2021 were $0.4 million compared to $1.6 million in Q4 Fiscal 2020. Items included in finance costs are summarized below:


		Q4 Fiscal 2021		Q4 Fiscal 2020
Interest on lease obligation	$	22	$	28
Loss on disposal of bonds		266		1,494
Unwinding of discount of environmental rehabilitation provision		66		106
	$	354	$	1,628

Income tax in Q4 Fiscal 2021 was a recovery of $4.0 million, compared to $0.5 million in Q4 Fiscal 2020. In Q4 Fiscal 2021, Henan Found was recognized as a High and New Technology Enterprise “HNTE” at the national level and its effective income tax rate was reduced to 15% from 25% in the prior years.


8.	Liquidity and Capital Resources


As at		March 31, 2021		March 31, 2020		Changes
Cash and cash equivalents	$	118,735	$	65,777	$	52,958
Short-term investment		80,357		76,742		3,615
	$	199,092	$	142,519	$	56,573
Working capital	$	184,014	$	130,351	$	53,663


		Three months ended March 31,								Year ended March 31,
		2021		2020			Changes			2021			2020			Changes
Cash flow
Cash provided by operating activities	$	2,231	$	6,278		$	(4,047	)	$	85,912		$	77,246		$	8,666
Cash provided (used) in investing activities		10,429		2,936			7,493			(40,974	)		(70,790	)		29,816
Cash provided (used) in financing activities		2,261		(563	)		2,824			(1,453	)		(2,931	)		1,478
Increase (decrease) in cash and cash equivalents		14,921		8,651			6,270			43,485			3,525			39,960
Effect of exchange rate changes on cash and cash equivalents		467		(4,768	)		5,235			9,473			(5,189	)		14,662
Cash and cash equivalents, beginning of the period		103,347		61,894			41,453			65,777			67,441			(1,664	)
Cash and cash equivalents, end of the period	$	118,735	$	65,777		$	52,958		$	118,735		$	65,777		$	52,958

Cash and cash equivalents and short-term investments as at March 31, 2021 were $199.1 million, up 40% or $56.6 million, compared to $142.5 million as at March 31, 2020. The increase was mainly due to the increase in cash flow from operations.

Working capital as at March 31, 2021 was $184.0 million, up 41% or $53.6 million, compared to $130.4 million as at March 31, 2020.

Cash flow provided by operating activities in Fiscal 2021 was $85.9 million, up 11% or $8.7 million, compared to $77.2 million in Fiscal 2020. The increase was due to

$82.8 million cash flow from operating activities before changes in non-cash operating working capital, up 10% or $7.4 million, compared to $75.4 million in Fiscal 2020; and
$3.1 million cash flow from changes in non-cash working capital, compared to $1.8 million in Fiscal 2020.

In Q4 Fiscal 2021, cash flow provided by operating activities was $2.2 million compared to $6.3 million in Q4 Fiscal 2020. The decrease was mainly due to the $9.4 million use of cash from working capital changes. Before changes in non-cash operating working capital, cash flows provided by operating activities in the current quarter were $11.9 million, up $2.7 million, compared to $9.2 million in Q4 Fiscal 2020.

Cash flow used in investing activities in Fiscal 2021 was $41.0 million, down 42% or $29.8 million, compared to $70.8 million in Fiscal 2020, and comprised primarily of:

$35.7 million spent on mineral exploration and development expenditures (Fiscal 2020 - $27.9 million);
$7.6 million spent on the acquisition of La Yesca project (Fiscal 2020 - $nil);


	Management’s Discussion and Analysis	Page 24

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Year Ended March 31, 2021

(Expressed in thousands of U.S. dollars, except per share data or unless otherwise stated)

$9.0 million spent to acquire plant and equipment (Fiscal 2020 - $7.4 million);
$7.1 million spent on investment in associate (Fiscal 2020 - $7.0 million);
$0.5 million spent on reclamation deposits (Fiscal 2020 - $1.7 million); and
$12.7 million spent on the acquisition of other investments (Fiscal 2020 - $7.9 million); offset by
$9.8 million proceeds from the net redemptions of short-term investments (Fiscal 2020 - $33.6 million spent on net purchase);
$nil from the disposal of XHP project (Fiscal 2020 - $6.1 million); and
$19.3 million proceeds from disposal of other investments (Fiscal 2020 - $8.5 million).

In Q4 Fiscal 2021, cash flow from investing activities was $10.4 million, compared to $2.9 million in Q4 Fiscal 2020, and comprised primarily of:

$6.5 million spent on mineral exploration and development expenditure (Q4 Fiscal 2020 - $6.0 million);
$1.0 million spent on the acquisition of La Yesca project (Q4 Fiscal 2020 - $nil);
$2.9 million spent to acquire plant and equipment (Q4 Fiscal 2020 - $1.2 million),
$0.1 million spent on reclamation deposits (Q4 Fiscal 2020 - $0.2 million), and
$nil million for the acquisition of other investments (Q4 Fiscal 2020 - $4.0 million), offset by
$1.4 million proceeds from disposal of other investments (Q4 Fiscal 2020 - $2.3 million); and
$19.1 million proceeds from the net redemption of short-term investments (Q4 Fiscal 2020 – $11.9 million).

Cash flow used in financing activities in Fiscal 2021 was $1.5 million, compared to $2.9 million in Fiscal 2020, and comprised mostly of:

$nil repayment to a bank loan (Fiscal 2020 - $4.4 million);
$0.6 million lease payment (Fiscal 2020 - $0.5 million);
$3.2 million in distributions to non-controlling shareholders (Fiscal 2020 - $3.3 million);
$4.4 million cash dividends paid (Fiscal 2020 - $4.3 million);
$0.8 million net repayment received from the non-controlling shareholder of Henan Found (Fiscal 2020 - $1.5 million);
$2.5 million cash received from non-controlling shareholders’ contribution (Fiscal 2020 - $nil); and
$3.5 million cash received arising from exercise of stock options (Fiscal 2020 - $8.0 million).

Cash flow from financing activities in Q4 Fiscal 2021 was $2.3 million, compared to $0.6 million used in financing activities in Q4 Fiscal 2020, and comprised primarily of:

$0.7 million advance to the non-controlling shareholder of Henan Found (Q4 Fiscal 2020 - $1.4 million);
$0.1 million lease payment (Q4 Fiscal 2020 - $0.1 million); offset by
$2.5 million cash received from non-controlling shareholders’ contribution (Q4 Fiscal 2020 – $nil); and
$0.7 million arising from exercise of stock options (Q4 Fiscal 2020 - $1.0 million).

Available sources of funding

The Company does not have unlimited resources and its future capital requirements will depend on many factors, including, among others, cash flow from operations. To the extent that its existing resources and the funds generated by future income are insufficient to fund the Company’s operations, the Company may need to raise


	Management’s Discussion and Analysis	Page 25

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Year Ended March 31, 2021

(Expressed in thousands of U.S. dollars, except per share data or unless otherwise stated)

additional funds through public or private debt or equity financing. If additional funds are raised through the issuance of equity securities, the percentage ownership of current shareholders will be reduced, and such equity securities may have rights, preferences or privileges senior to those of the holders of the Company’s common shares. No assurance can be given that additional financing will be available or that, if available, can be obtained on terms favourable to the Company and its shareholders. If adequate funds are not available, the Company may be required to delay, limit or eliminate some or all of its proposed operations. The Company believes it has sufficient capital to meet its cash needs for the next 12 months, including the cost of compliance with continuing reporting requirements.


9.	Financial Instruments and Related Risks

(a) Fair value

Level 1 – Unadjusted quoted prices at the measurement date for identical assets or liabilities in active markets.

Level 2 – Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3 – Unobservable inputs which are supported by little or no market activity.


		Fair value as at March 31, 2021
Recurring measurements		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	118,735	$	-	$	-	$	118,735
Short-term investments - money market instruments		64,545		-		-		64,545
Investments in public companies		13,444		-		-		13,444
Investments in private companies		-		-		2,289		2,289

		Fair value as at March 31, 2020
Recurring measurements		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	65,777	$	-	$	-	$	65,777
Short-term investments - money market instruments		53,430		-		-		53,430
Investments in public companies		6,633		-		-		6,633
Investments in private companies		-		-		2,117		2,117

There were no transfers into or out of Level 3 during the years ended March 31, 2021 and 2020.


	Management’s Discussion and Analysis	Page 26

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Year Ended March 31, 2021

(Expressed in thousands of U.S. dollars, except per share data or unless otherwise stated)

(b) Liquidity risk


				March 31, 2021				March 31, 2020
		Within a year		2-5 years		Total		Total
Accounts payable and accrued liabilities		30,298		-		30,298		23,129
Lease obligation		657		1,084		1,741		2,069
	$	30,955	$	1,084	$	32,039	$	25,198

The Company currently does not engage in foreign exchange currency hedging. The Company's exposure to currency risk affect net income is summarized as follows:


		March 31, 2021		March 31, 2020
Financial assets denominated in U.S. Dollars	$	58,610	$	60,534

Financial liabilities denominated in U.S. Dollars	$	52	$	-

As at March 31, 2021, with other variables unchanged, a 10% strengthening (weakening) of the CAD against the USD would have decreased (increased) net income by approximately $5.9 million.

(d) Interest rate risk

The Company is exposed to interest rate risk on its cash equivalents, short-term investments, and loan to a related party. As at March 31, 2021, all of its interest-bearing cash equivalents and short-term investments earn interest at market rates that are fixed to maturity or at variable interest rates with terms of less than one year. The loan to the related party bears an interest rate of 4.35% per annum, which approximates the prevailing commercial lending rates in China as of March 31, 2021. The Company monitors its exposure to changes in interest rates on cash equivalents, short term investments, and loan to the related party. Due to the short term nature of these financial instruments, fluctuations in interest rates would not have a significant impact on the Company’s net income.

(e) Credit risk


	Management’s Discussion and Analysis	Page 27

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Year Ended March 31, 2021

(Expressed in thousands of U.S. dollars, except per share data or unless otherwise stated)

or other receivables which were past due on March 31, 2021 (at March 31, 2020 - $nil) for which no provision is recognized.

(f) Equity price risk


10.	Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements.


11.	Transactions with Related Parties

Related party transactions are made on terms agreed upon with the related parties. The balances with related parties are unsecured. Related party transactions not disclosed elsewhere in this MD&A are as follows:


(i)	Due from related parties


Due from related parties		March 31, 2021		March 31, 2020
NUAG (a)	$	59	$	94
WHG (b)		19		-
Henan Non-ferrous (c)		769		1,425
	$	847	$	1,519

(a)	The Company recovers costs for services rendered to NUAG and expenses incurred on behalf of NUAG pursuant to a services and administrative costs reallocation agreement. During the year ended March 31, 2021, the Company recovered $644 (year ended March 31, 2020 - $530), from NUAG for services rendered and expenses incurred on behalf of NUAG. The costs recovered from NUAG were recorded as a direct reduction of general and administrative expenses on the consolidated statements of income.

(b)	The Company recovers costs for services rendered to WHG and expenses incurred on behalf of WHG pursuant to a services and administrative costs reallocation agreement. During the year ended March 31, 2021, the Company recovered $89 (year ended March 31, 2020 - $nil), from WHG for services rendered and expenses incurred on behalf of WHG. The costs recovered from WHG were recorded as a direct reduction of general and administrative expenses on the consolidated statements of income.

(c)	In January 2020, Henan Found advanced a loan of $1,436 (RMB¥10 million) to Henan Non-ferrous. The loan has a term of four months and bears an interest rate of 4.35% per annum. In May 2020, the loan, including accumulated interest, of $1,423 (RMB¥10.1 million) was repaid in full.

	In January 2021, Henan Found advanced a loan of $744 (RMB¥5 million) to Henan Non-ferrous. The loan has a term of four months and bears an interest rate of 4.35% per annum.

The balances with related parties are unsecured.


(ii)	Compensation of key management personnel


	Management’s Discussion and Analysis	Page 28

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Year Ended March 31, 2021

(Expressed in thousands of U.S. dollars, except per share data or unless otherwise stated)


		Years Ended March 31,
		2021		2020
Directors' fees and bonus	$	306	$	293
Salaries and bonus for key management personnel		2,946		2,519
Share-based compensation		2,814		1,487
	$	6,066	$	4,299

Share-based compensation was measured at grant date fair value.


12.	Alternative Performance (Non-IFRS) Measures

The following alternative performance measures are used by the Company to manage and evaluate operating performance of the Company’s mines and are widely reported in the silver mining industry as benchmarks for performance, but are alternative performance (non-IFRS) measures that do not have standardized meaning prescribed by IFRS and therefore unlikely to be comparable to similar measures presented by other companies. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. To facilitate a better understanding of these measures, the tables in this section provide the reconciliation of these measures to the financial statements for the year ended March 31, 2021 and 2020:


(a)	Working Capital

Working capital is an alternative performance (non-IFRS) measure calculated as current asset less current liabilities. Working capital dose not have any standardized meaning prescribed by IFRS and is therefore unlikely to be comparable to similar measures presented by other companies. The Company and certain investors use this information to evaluate whether the Company is able to meet its current obligations using its current assets.


(b)	Costs per Ounce of Silver

Cash cost and all-in sustaining cost (“AISC”) per ounce of silver, net of by-product credits, are non-IFRS measures. The Company produces by-product metals incidentally to our silver mining activities. We have adopted the practice of calculating a performance measure with the net cost of producing an ounce of silver, our primary payable metal, after deducting revenues gained from incidental by-product production. This performance measure has been commonly used in the mining industry for many years and was developed as a relatively simple way of comparing the net production costs of the primary metal for a specific period against the prevailing market price of such metal.

Cash cost is calculated by deducting revenue from the sales of all metals other than silver and is calculated per ounce of silver sold.

AISC is an extension of the “cash cost” metric and provides a comprehensive measure of the Company’s operating performance and ability to generate cash flows. AISC has been calculated based on World Gold Council (“WGC”) guidance released in 2013 and undated in 2018. The WGC is not a regulatory organization and does not have the authority to develop accounting standards for disclosure requirements.

AISC is based on the Company’s cash costs, net of by-product sales, and further includes corporate general and administrative expense, government fee and other taxes, reclamation cost accretion, lease liability payments, and sustaining capital expenditures. Sustaining capital expenditures are those costs incurred to sustain and maintain existing assets at current productive capacity and constant planned levels of production output. Excluded are non-sustaining capital expenditures, which result in a material increase in the life of assets, materially increase resources or reserves, productive capacity, or future earning potential, or significant improvement in recovery or grade, or which do not relate to the current production activities. The Company believes that this measure represents the total sustainable costs of producing silver from current operations and provides additional information about the Company’s operational performance and ability to generate cash flows.

The following table provides a reconciliation of cash cost and AISC per ounce of silver, net of by-product credits:


	Management’s Discussion and Analysis	Page 29

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Year Ended March 31, 2021

(Expressed in thousands of U.S. dollars, except per share data or unless otherwise stated)


			Year ended March 31, 2021															Year ended March 31, 2020
(Expressed in thousands of U.S. dollars, except ounce and per ounce amount)			Ying Mining															Ying Mining
			District			GC			Other			Corporate			Consolidated			District			GC			Other			Corporate			Consolidated
Production costs expensed as reported	A	$	53,023		$	16,072		$	449		$	-		$	69,544		$	47,236			14,793		$	-		$	-		$	62,029
By-product sales
Gold			(5,169	)		-			(1,553	)		-			(6,722	)		(3,911	)		-			-			-			(3,911	)
Lead			(42,836	)		(7,628	)		-			-			(50,464	)		(43,312	)		(8,654	)		-			-			(51,966	)
Zinc			(5,898	)		(15,895	)		-			-			(21,793	)		(4,911	)		(10,869	)		-			-			(15,780	)
Other			(1,294	)		(641	)		-			-			(1,935	)		(1,683	)		(617	)		-			-			(2,300	)
Total by-product sales	B		(55,197	)		(24,164	)		(1,553	)		-			(80,914	)		(53,817	)		(20,140	)		-			-			(73,957	)
Total cash cost, net of by-product credits	C=A+B		(2,174	)		(8,092	)		(1,104	)		-			(11,370	)		(6,581	)		(5,347	)		-			-			(11,928	)
Add: Mineral resources tax			4,072			932			-			-			5,004			3,718			822			-			-			4,540
General and administrative			6,191			2,812			584			12,365			21,952			6,849			2,738			469			10,094			20,150
Amortization included in general and administrative			(507	)		(373	)		(376	)		(533	)		(1,789	)		(753	)		(469	)		(289	)		(447	)		(1,958	)
Property evaluation and business development*			-			-			42			691			733			-			-			-			679			679
Government fees and other taxes			1,781			588			5			-			2,374			1,591			496			2			26			2,115
Reclamation accretion			196			26			30			-			252			366			24			32			-			422
Lease payment			-			-			-			563			563			-			-			-			503			503
Sustaining capital expenditures			24,603			4,110			389			501			29,603			25,302			2,274			-			820			28,396
All-in sustaining cost, net of by-product credits	F		34,162			3			(430	)		13,587			47,322			30,492			538			214			11,675			42,919
Add: Non-sustaining capital expenditures			11,698			852			2,480			-			15,030			6,008			812			88			-			6,908
All-in cost, net of by-product credits	G		45,860			855			2,050			13,587			62,352			36,500			1,350			302			11,675			49,827
Silver ounces sold ('000s)	H		5,610			705			-			-			6,315			5,558			699			-			-			6,257
Cash cost per ounce of silver, net of by-product credits	(A+B)/H	$	(0.39	)	$	(11.48	)	$	-		$	-		$	(1.80	)	$	(1.18	)	$	(7.65	)	$	-		$	-		$	(1.91	)
All-in sustaining cost per ounce of silver, net of by-product credits	F/H	$	6.09		$	-		$	-		$	-		$	7.49		$	5.49		$	0.77		$	-		$	-		$	6.86
All-in cost per ounce of silver, net of by-product credits	G/H	$	8.17		$	1.21		$	-		$	-		$	9.87		$	6.57		$	1.93		$	-		$	-		$	7.96

By-product credits per ounce of silver
Gold			(0.92	)		-			-			-			(1.06	)		(0.70	)		-			-			-			(0.63	)
Lead			(7.64	)		(10.82	)		-			-			(7.99	)		(7.79	)		(12.38	)		-			-			(8.31	)
Zinc			(1.05	)		(22.55	)		-			-			(3.45	)		(0.88	)		(15.55	)		-			-			(2.52	)
Other			(0.23	)		(0.91	)		-			-			(0.31	)		(0.30	)		(0.88	)		-			-			(0.37	)
Total by-product credits per ounce of silver		$	(9.84	)	$	(34.28	)		-		$	-		$	(12.81	)	$	(9.68	)	$	(28.81	)	$	-		$	-		$	(11.82	)

*Recovery of $3,970, arising the break fee of $6,497 (CAD$9,000) receipt from Guyana Goldfields net of expenses of $2,527, was excluded for the nine months ended December 31, 2020.


	Management’s Discussion and Analysis	Page 30

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Year Ended March 31, 2021

(Expressed in thousands of U.S. dollars, except per share data or unless otherwise stated)


			Three months ended March 31, 2021															Three months ended March 31, 2020
(Expressed in thousands of U.S. dollars, except ounce and per ounce amount)			Ying Mining															Ying Mining
			District			GC			Other			Corporate			Consolidated			District			GC			Other			Corporate			Consolidated
Production costs expensed as reported	A	$	11,107		$	2,977		$	-		$	-		$	14,084		$	6,924			1,420	$		-		$	-		$	8,344
By-product sales
Gold			(1,006	)		-			-			-			(1,006	)		(625	)		-			-			-			(625	)
Lead			(7,450	)		(1,399	)		-			-			(8,849	)		(5,562	)		(892	)		-			-			(6,454	)
Zinc			(1,342	)		(3,138	)		-			-			(4,480	)		(452	)		(1,094	)		-			-			(1,546	)
Other			(182	)		24			-			-			(158	)		(74	)		(327	)		-			-			(401	)
Total by-product sales	B		(9,980	)		(4,513	)		-			-			(14,493	)		(6,713	)		(2,313	)		-			-			(9,026	)
Total cash cost, net of by-product credits	C=A-B		1,127			(1,536	)		-			-			(409	)		211			(893	)		-			-			(682	)
Add: Mineral resources tax			726			172			-			-			898			463			96			-			-			559
General and administrative			1,600			698			133			3,369			5,800			2,306			978			84			2,590			5,958
Amortization included in general and administrative			(136	)		(98	)		(100	)		(142	)		(476	)		(420	)		(228	)		(65	)		(122	)		(835	)
Property evaluation and business development*			-			-			42			171			213			-			-			-			274			274
Government fees and other taxes			320			89			-			-			409			216			21			-			1			238
Reclamation accretion			51			7			8			-			66			91			6			8			-			105
Lease payment			-			-			-			149			149			-			-			-			134			134
Sustaining capital expenditures			5,674			730			193			8			6,605			5,569			760			-			52			6,381
All-in sustaining cost, net of by-product credits	F		9,362			62			276			3,555			13,255			8,436			740			27			2,929			12,132
Add: Non-sustaining capital expenditures			1,534			140			1,164			-			2,838			649			115			1			-			765
All-in cost, net of by-product credits	G		10,896			202			1,440			3,555			16,093			9,085			855			28			2,929			12,897
Silver ounces sold ('000s)	H		936			120			-			-			1,056			711			89			-			-			800
Cash cost per ounce of silver, net of by-product credits	(A+B)/H	$	1.20		$	(12.80	)	$	-		$	-		$	(0.39	)	$	0.30			(10.03	)	$	-		$	-		$	(0.85	)
All-in sustaining cost per ounce of silver, net of by-product credits	F/H	$	10.00		$	0.52		$	-		$	-		$	12.55		$	11.86			8.31		$	-		$	-		$	15.17
All-in cost per ounce of silver, net of by-product credits	G/H	$	11.64		$	1.68		$	-		$	-		$	15.24		$	12.78			9.61		$	-		$	-		$	16.12

By-product credits per ounce of silver
Gold			(1.07	)		-			-			-			(0.95	)		(0.88	)		-			-			-			(0.78	)
Lead			(7.96	)		(11.66	)		-			-			(8.38	)		(7.82	)		(10.02	)		-			-			(8.07	)
Zinc			(1.43	)		(26.15	)		-			-			(4.24	)		(0.64	)		(12.29	)		-			-			(1.93	)
Other			(0.19	)		0.20			-			-			(0.15	)		(0.10	)		(3.67	)		-			-			(0.50	)
Total by-product credits per ounce of silver		$	(10.65	)	$	(37.61	)		-		$	-		$	(13.72	)	$	(9.44	)	$	(25.98	)	$	-		$	-		$	(11.28	)


(c)	Costs per Tonne of Ore Processed

The Company uses cost per tonne of ore processed to manage and evaluate operating performance at each of its mines. Cost per tonne of ore processed is calculated based on total production costs on a sales basis, adjusted for changes in inventory, to arrive at total production costs that relate to ore production during the period. These total production costs are then further divided into mining cost, shipping cost, and milling cost. Cost per tonne of ore processed is the total of per tonne mining cost, per tonne shipping cost, and per tonne milling cost.

All-in sustaining production cost per tonne is an extension of the cash production cost per tonne and provides a comprehensive measure of the Company’s operating performance and ability to generate cash flows. All-in sustaining production cost per tonne is based on the Company’s cash production cost, and further includes corporate general and administrative expense, government fee and other taxes, reclamation cost accretion, lease liability payments, and sustaining capital expenditures. The Company believes that this measure represents the total sustainable costs of processing ore from current operations and provides additional information about the Company’s operational performance and ability to generate cash flows.


	Management’s Discussion and Analysis	Page 31

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Year Ended March 31, 2021

(Expressed in thousands of U.S. dollars, except per share data or unless otherwise stated)

The following table provides a reconciliation of production cost and all-in sustaining production cost per tonne of ore processed:


						Year ended March 31, 2021															Year ended March 31, 2020
(Expressed in thousands of U.S. dollars, except ounce and per ounce amount)			Ying Mining															Ying Mining
			District			GC			Other			Corporate			Consolidated			District			GC			Other			Corporate			Consolidated
Production costs expensed as reported		$	53,023		$	16,072		$	449		$	-		$	69,544		$	47,236		$	14,793		$	-		$	-		$	62,029
Depreciation and amortization			17,844			3,272			318			-			21,434			17,835			2,880			-			-			20,715
Changes in stockpile and concentrate inventory
Less: stockpile and concentrate inventory - Beginning			(4,474	)		(241	)		(790	)		-			(5,505	)		(5,947	)		(213	)		(834	)		-			(6,994	)
Add: stockpile and concentrate inventory - Ending			5,996			442			34			-			6,472			4,474			241			790			-			5,505
Adjustment for foreign exchange movement			(492	)		(27	)		(11	)		-			(530	)		191			156			44			-			391
			1,030			174			(767	)		-			437			(1,282	)		184			-			-			(1,098	)
Total production cost		$	71,897		$	19,518		$	-		$	-		$	91,415		$	63,789		$	17,857		$	-					$	81,646
Depreciation and amortization charged to mining costs	A		16,711			2,872			-			-			19,583			16,517			2,398			-			-			18,915
Depreciation and amortization charged to milling costs	B		1,189			432			-			-			1,621			1,128			486			-			-			1,614
Total non-cash production cost		$	17,900		$	3,304		$	-		$	-		$	21,204		$	17,645		$	2,884		$	-		$	-			20,529
Cash mining cost	C		45,216			12,141			-			-			57,357			37,688			10,947			-			-			48,635
Shipping cost	D		2,471			-			-			-			2,471			2,346			-			-			-			2,346
Cash milling cost	E		6,310			4,073			-			-			10,383			6,111			4,025			-			-			10,136
Total cash production cost		$	53,997		$	16,214		$	-		$	-		$	70,211		$	46,145		$	14,972		$	-		$	-		$	61,117
General and administrative			6,191			2,812			584			12,365			21,952			6,849			2,738			469			10,094			20,150
Property evaluation and business development*			-			-			42			691			733			-			-			-			679			679
Amortization included in general and administrative			(507	)		(373	)		(376	)		(533	)		(1,789	)		(753	)		(469	)		(289	)		(447	)		(1,958	)
Government fees and other taxes			1,781			588			5			-			2,374			1,591			496			2			26			2,115
Reclamation accretion			196			26			30			-			252			366			24			32			-			422
Lease payment			-			-			-			563			563			-			-			-			503			503
Sustaining capital expenditures			24,603			4,110			389			501			29,603			25,302			2,274			-			820			28,396
All-in sustaining production cost	F	$	86,261		$	23,377		$	674		$	13,587		$	123,899		$	79,500		$	20,035		$	214		$	11,675		$	111,424
Non-sustaining capital expenditures			11,698			852			2,480			-			15,030			6,008			812			88			-		$	6,908
All in production cost	G	$	97,959		$	24,229		$	3,154		$	13,587		$	138,929		$	85,508		$	20,847		$	302		$	11,675		$	118,332
Ore mined ('000s)	H		650.025			314.900			-			-			964.925			598.197			287.633			-						885.830
Ore shipped ('000s)	I		657.337			314.900			-			-			972.237			598.327			287.633			-						885.960
Ore milled ('000s)	J		651.402			316.179			-			-			967.581			601.605			290.610			-						892.215
Per tonne Production cost
Non-cash mining cost ($/tonne)	K=A/H		25.71			9.12			-			-			20.29			27.61			8.34			-			-			21.35
Non-cash milling cost ($/tonne)	L=B/J		1.83			1.37			-			-			1.68			1.87			1.67			-			-			1.81
Non-cash production cost ($/tonne)	M=K+L	$	27.54		$	10.49		$	-		$	-		$	21.97		$	29.48		$	10.01		$	-		$	-		$	23.16
Cash mining cost ($/tonne)	N=C/H		69.56			38.56			-			-			59.44			63.00			38.06			-			-			54.90
Shipping costs ($/tonne)	O=D/I		3.76			-			-			-			2.54			3.92			-			-			-			2.65
Cash milling costs ($/tonne)	P=E/J		9.69			12.88			-			-			10.73			10.16			13.85			-			-			11.36
Cash production costs ($/tonne)	Q=N+O+P	$	83.01		$	51.44		$	-		$	-		$	72.71		$	77.08		$	51.91		$	-		$	-		$	68.91
All-in sustaining production costs ($/tonne)	P=(F-C-D-E)/J+Q	$	132.54		$	74.09		$	-		$	-		$	128.20		$	132.52		$	69.33		$	-		$	-		$	125.29
All in costs ($/tonne)	S=P+(G-F)/J	$	150.50		$	76.79		$	-		$	-		$	143.73		$	142.51		$	72.13		$	-		$	-		$	133.04

*Recovery of $3,970, arising the break fee of $6,497 (CAD$9,000) receipt from Guyana Goldfields net of expenses of $2,527, was excluded for the nine months ended December 31, 2020


	Management’s Discussion and Analysis	Page 32

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Year Ended March 31, 2021

(Expressed in thousands of U.S. dollars, except per share data or unless otherwise stated)


			Three months ended March 31, 2021																		Three months ended March 31, 2020
(Expressed in thousands of U.S. dollars, except ounce and per ounce amount)			Ying Mining															Ying Mining
			District			GC			Other			Corporate			Consolidated			District			GC			Other			Corporate			Consolidated
Production costs expensed as reported		$	11,107		$	2,977		$	-		$	-		$	14,084		$	6,924		$	1,420		$	-		$	-		$	8,344
Depreciation and amortization as reported			3,802			705			-			-			4,507			2,712			434			-			-			3,146
Change in stockpile and concentrate inventory
Less: stockpile and concentrate inventory - Beginning			(6,156	)		(499	)		(34	)		-			(6,689	)		(6,158	)		(322	)		(805	)		-			(7,285	)
Add: stockpile and concentrate inventory - Ending			5,996			442			34			-			6,472			4,474			241			790			-			5,505
Adjustment for foreign exchange movement			232			6			-			-			238			95			148			15			-			258
			72			(51	)		-			-			21			(1,589	)		67			-			-			(1,522	)
Total production cost		$	14,981		$	3,631		$	-		$	-		$	18,633		$	8,047		$	1,921		$	-					$	9,968
Depreciation and amortization charged to mining costs	A		3,382			580			-			-			3,962			2,060			354			-			-			2,414
Depreciation and amortization charged to milling costs	B		322			119			-			-			441			192			71			-			-			263
Total non-cash production cost		$	3,704		$	699		$	-		$	-		$	4,403		$	2,252		$	425		$	-					$	2,677
Cash mining cost	C		9,382			2,124			-			-			11,506			4,725			952			-			-			5,677
Shipping cost	D		416			-			-			-			416			272			-			-			-			272
Cash milling cost	E		1,479			808			-			-			2,287			798			544			-			-			1,342
Total cash production cost		$	11,277		$	2,932		$	-		$	-		$	14,209		$	5,795		$	1,496		$	-		$	-		$	7,291
General and administrative			1,600			698			133			3,369			5,800			2,306			978			84			2,590			5,958
Property evaluation and business development*			-			-			42			171			213			-			-			-			274			274
Amortization included in general and administrative			(136	)		(98	)		(100	)		(142	)		(476	)		(420	)		(228	)		(65	)		(122	)		(835	)
Government fees and other taxes			320			89			-			-			409			216			21			-			1			238
Reclamation accretion			51			7			8			-			66			91			6			8			-			105
Lease payment			-			-			-			149			149			-			-			-			134			134
Sustaining capital expenditures			5,674			730			193			8			6,605			5,569			760			-			52			6,381
All-in sustaining production cost	F	$	18,786		$	4,358		$	276		$	3,555		$	26,975		$	13,557		$	3,033		$	27		$	2,929		$	19,546
Non-sustaining capital expenditures			1,534			140			1,164			-			2,838			649			115			1			-			765
All in production cost	G	$	20,320		$	4,498		$	1,440		$	3,555		$	29,813		$	14,206		$	3,148		$	28		$	2,929		$	20,311
Ore mined ('000s)	H		112.561			50.511			-			-			163.072			69.379			37.216			-			-			106.595
Ore shipped ('000s)	I		117.205			50.511			-			-			167.716			68.737			37.216			-			-			105.953
Ore milled ('000s)	J		131.725			48.949			-			-			180.674			69.188			33.243			-			-			102.431
Per tonne Production cost
Non-cash mining cost ($/tonne)	K=A/H		30.05			11.48			-			-			24.30			29.69			9.51			-			-			22.65
Non-cash milling cost ($/tonne)	L=B/J		2.44			2.43			-			-			2.44			2.78			2.14			-			-			2.57
Non-cash production cost ($/tonne)	M=K+L	$	32.49		$	13.91		$	-		$	-		$	26.74		$	32.47		$	11.65		$	-		$	-		$	25.22
Cash mining cost ($/tonne)	N=C/H		83.35			42.05			-			-			70.56			68.10			25.58			-			-			53.26
Shipping costs ($/tonne)	O=D/I		3.55			-			-			-			2.48			3.96			-			-			-			2.57
Cash milling costs ($/tonne)	P=E/J		11.23			16.51			-			-			12.66			11.53			16.36			-			-			13.10
Cash production costs ($/tonne)	Q=N+O+P	$	98.13		$	58.56		$	-		$	-		$	85.70		$	83.59		$	41.94		$	-		$	-		$	68.93
All-in sustaining production costs ($/tonne)	P=(F-C-D-E)/J+Q	$	155.14		$	87.69		$	-		$	-		$	156.36		$	195.78		$	88.18		$	-		$	-		$	188.57
All in costs ($/tonne)	S=P+(G-F)/J	$	166.78		$	90.55		$	-		$	-		$	172.07		$	205.16		$	91.63		$	-		$	-		$	196.04


13.	Critical Accounting Policies, Judgments, and Estimates

The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the amounts reported on the consolidated financial statements. These critical accounting estimates represent management estimates and judgements that are uncertain and any changes in these estimates could materially impact the Company’s consolidated financial statements. Management continuously reviews its estimates and assumptions using the most current information available. The Company’s critical accounting policies, judgements and estimates are described in Note 2 of the audited consolidated financial statements for the year ended March 31, 2021.


14.	New Accounting Standards

New accounting standards and interpretations have been published that are not mandatory for the current period and have not been early adopted. These standards are not expected to have a material impact on the Company.


15.	Other MD&A Requirements

Additional information relating to the Company:

(a) may be found on SEDAR at www.sedar.com;

(b) may be found at the Company’s website www.silvercorp.ca;


	Management’s Discussion and Analysis	Page 33

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Year Ended March 31, 2021

(Expressed in thousands of U.S. dollars, except per share data or unless otherwise stated)

(d) is also provided in the Company’s annual audited consolidated financial statements as of March 31, 2021.


16.	Outstanding Share Data

As at the date of this MD&A, the following securities were outstanding:


(a)	Share Capital

Authorized - unlimited number of common shares without par value

Issued and outstanding – 175,882,210 common shares with a recorded value of $250.8 million Shares subject to escrow or pooling agreements - $nil.


(b)	Options

As at the date of this MD&A, the outstanding options comprise the following:


Number of Options	Exercise Price (CAD$)	Expiry Date
373,750	$2.60	2021-11-16
313,750	$3.40	2021-08-24
578,668	$5.46	2025-05-26
490,000	$9.45	2025-11-11
1,756,168

Outstanding – 2,215,920 RSUs with an average grant date closing price of CAD$6.28 per share.


17.	Risks and Uncertainties

The Company is exposed to a number of risks in conducting its business, including but not limited to: metal price risk as the Company derives its revenue from the sale of silver, lead, zinc, and gold; credit risk in the normal course of dealing with other companies and financial institutions; foreign exchange risk as the Company reports its financial statements in USD whereas the Company operates in jurisdictions that utilize other currencies; equity price risk and interest rate risk as the Company has investments in marketable securities that are traded in the open market or earn interest at market rates that are fixed to maturity or at variable interest rates; inherent risk of uncertainties in estimating mineral reserves and mineral resources; political risks; economic and social risks related to conducting business in foreign jurisdictions such as China; environmental risks; risks related to its relations with employees and local communities where the Company operates, and emerging risks relating to the spread of COVID-19, which has to date resulted in profound health and economic impacts globally and which presents future risks and uncertainties that are largely unknown at this time.

Management and the Board continuously assess risks that the Company is exposed to and attempt to mitigate these risks where practical through a range of risk management strategies.

These and other risks are described in the Company’s Annual Information Form, NI 43-101 technical reports, Form 40-F, and Audited Consolidated Financial Statements, which are available on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. Readers are encouraged to refer to these documents for a more detailed description of some of the risks and uncertainties inherent to Silvercorp’s business.

COVID-19

The Company's business, operations and financial condition could be materially adversely affected by the outbreak of pandemics or other health crises, such as the outbreak of COVID-19 that was designated as a pandemic by the World Health Organization on March 11, 2020. The international response to the spread of COVID-19 has led to significant restrictions on travel, temporary business closures, quarantines, global stock market volatility, and a general reduction in consumer activity. Such public health crises can result in operating, supply chain and project development delays and disruptions, global stock market and financial market volatility, declining trade and market sentiment, reduced movement of people and labour shortages, and travel and


	Management’s Discussion and Analysis	Page 34

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Year Ended March 31, 2021

(Expressed in thousands of U.S. dollars, except per share data or unless otherwise stated)

shipping disruption and shutdowns, including as a result of government regulation and prevention measures, or a fear of any of the foregoing, all of which could affect commodity prices, interest rates, credit risk and inflation. In addition, the current COVID-19 pandemic, and any future emergence and spread of similar pathogens could have an adverse impact on global economic conditions which may adversely impact the Company's operations, and the operations of suppliers, contractors and service providers.

The Company may experience business interruptions, including suspended (whether government mandated or otherwise) or reduced operations relating to COVID-19 and other such events outside of the Company's control, which could have a material adverse impact on its business, operations and operating results, financial condition and liquidity.

As at the date of this MD&A, the duration of the business disruptions internationally and related financial impact of COVID-19 cannot be reasonably estimated. It is unknown whether and how the Company may be affected if the pandemic persists for an extended period of time.

The Company's exposure to such public health crises also includes risks to employee health and safety. Should an employee, contractor, community member or visitor become infected with a serious illness that has the potential to spread rapidly, this could place the Company's workforce at risk.

Metal Price Risk

The Company’s sales prices for lead and zinc pounds are fixed against the Shanghai Metals Exchange as quoted at www.shmet.com; gold ounces are fixed against the Shanghai Gold Exchange as quoted at www.sge.com.cn and silver ounces are fixed against the Shanghai White Platinum & Silver Exchange as quoted at www.ex-silver.com.

The Company’s revenues, if any, are expected to be in large part derived from the mining and sale of silver, lead, zinc, and gold contained in metal concentrates. The prices of those commodities have fluctuated widely, particularly in recent years, and are affected by numerous factors beyond the Company’s control including international and regional economic and political conditions; expectations of inflation; currency exchange fluctuations; interest rates; global or regional supply and demand for jewellery and industrial products containing silver and other metals; sale of silver and other metals by central banks and other holders, speculators and producers of silver and other metals; availability and cost of metal substitutes; and increased production due to new mine developments and improved mining and production methods. The price of base and precious metals may have a significant influence on the market price of the Company’s shares and the value of its projects. The effect of these factors on the price of base and precious metals, and therefore the viability of the Company’s exploration projects and mining operations, cannot be accurately predicted.

If silver and other metals prices were to decline significantly or for an extended period of time, the Company may be unable to continue operations, develop its projects, or fulfil obligations under agreements with the Company’s joint venture partners or under its permits or licenses.

Permits and licenses

All mineral resources and mineral reserves of the Company’s subsidiaries are owned by their respective governments, and mineral exploration and mining activities may only be conducted by entities that have obtained or renewed exploration or mining permits and licenses in accordance with the relevant mining laws and regulations. No guarantee can be given that the necessary exploration and mining permits and licenses will be issued to the Company or, if they are issued, that they will be renewed, or if renewed under reasonable operational and/or financial terms, or in a timely manner, or that the Company will be in a position to comply with all conditions that are imposed.

Nearly all mining projects require government approval. There can be no certainty that approvals necessary to develop and operate mines on the Company’s properties will be granted or renewed in a timely and/or economical manner, or at all.


	Management’s Discussion and Analysis	Page 35

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Year Ended March 31, 2021

(Expressed in thousands of U.S. dollars, except per share data or unless otherwise stated)

Title to properties

With respect to the Company’s Chinese properties, while the Company has investigated title to all of its mineral claims and to the best of its knowledge, title to all of its properties is in good standing, the properties may be subject to prior unregistered agreements or transfers and title may be affected by undetected defects. There may be valid challenges to the title of the Company’s properties which, if successful, could impair development and/or operations. The Company cannot give any assurance that title to its properties will not be challenged. Title insurance is generally not available for mineral properties and the Company’s ability to ensure that it has obtained secure claims to individual mineral properties or mining concessions may be severely constrained. The Company’s mineral properties in China have not been surveyed, and the precise location and extent thereof may be in doubt.

Operations and political conditions

Most of the properties in which the Company has an interest are located in China, which has different regulatory and legal standards than those in North America. Even when the Company’s mineral properties are proven to host economic reserves of metals, factors such as political instability, terrorism, opposition and harassment from local miners, or governmental expropriation or regulation may prevent or restrict mining of any such deposits or repatriation of profits.

Most of the Company’s operations are located in China. These operations are subject to the risks normally associated with conducting business in China. Some of these risks are more prevalent in countries which are less developed or have emerging economies, including uncertain political and economic environments, as well as risks of war and civil disturbances or other risks which may limit or disrupt a project, restrict the movement of funds or result in the deprivation of contractual rights or the taking of property by nationalization or expropriation without fair compensation, risk of adverse changes in laws or policies, increases in foreign taxation or royalty obligations, license fees, permit fees, delays in obtaining or the inability to obtain necessary governmental permits, limitations on ownership and repatriation of earnings, and foreign exchange controls and currency devaluations.

In addition, the Company may face import and export regulations, including export restrictions, disadvantages of competing against companies from countries that are not subject to similar laws, restrictions on the ability to pay dividends offshore, and risk of loss due to disease and other potential endemic health issues. Although the Company is not currently experiencing any significant or extraordinary problems in China arising from such risks, there can be no assurance that such problems will not arise in the future. The Company currently does not carry political risk insurance coverage.

The Company’s interests in its mineral properties are held through joint venture companies established under and governed by the laws of China. The Company’s joint venture partners in China include state-sector entities and, like other state-sector entities, their actions and priorities may be dictated by government policies instead of purely commercial considerations. Additionally, companies with a foreign ownership component operating in China may be required to work within a framework which is different from that imposed on domestic Chinese companies. The Chinese government currently allows foreign investment in certain mining projects under central government guidelines. There can be no assurance that these guidelines will not change in the future.

Regulatory environment in China

The Company conducts its mining operations in China. The laws of China differ significantly from those of Canada and all such laws are subject to change. Mining is subject to potential risks and liabilities associated with pollution of the environment and disposal of waste products occurring as a result of mineral exploration and production.

Failure to comply with applicable laws and regulations may result in enforcement actions and may also include corrective measures requiring capital expenditures, installation of additional equipment or remedial actions. Parties engaged in mining operations may be required to compensate those suffering loss or damage by reason of mining activities and may have civil or criminal fines or penalties imposed for violations of applicable laws and regulations.


	Management’s Discussion and Analysis	Page 36

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Year Ended March 31, 2021

(Expressed in thousands of U.S. dollars, except per share data or unless otherwise stated)

New laws and regulations, amendments to existing laws and regulations, administrative interpretation of existing laws and regulations, or more stringent enforcement of existing laws and regulations could have a material adverse impact on future cash flow, results of operations and the financial condition of the Company.

Environmental risks

The Company’s activities are subject to extensive laws and regulations governing environmental protection and employee health and safety, including environmental laws and regulations in China. These laws address emissions into the air, discharges into water, management of waste, management of hazardous substances, protection of natural resources, antiquities and endangered species, and reclamation of lands disturbed by mining operations.

There are also laws and regulations prescribing reclamation activities on some mining properties. Environmental legislation in many countries, including China, is evolving and the trend has been toward stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and increasing responsibility for companies and their officers, directors and employees. Compliance with environmental laws and regulations may require significant capital outlays on behalf of the Company and may cause material changes or delays in the Company’s intended activities. There can be no assurance that the Company has been or will be at all times in complete compliance with current and future environmental and health and safety laws and permits will not materially adversely affect the Company’s business, results of operations or financial condition. It is possible that future changes in these laws or regulations could have a significant adverse impact on some portion of the Company’s business, causing the Company to reevaluate those activities at that time. The Company’s compliance with environmental laws and regulations entail uncertain cost.

Risks and hazards of mining operations

Mining is inherently dangerous and the Company’s operations are subject to a number of risks and hazards including, without limitation:


	(i)	environmental hazards;
	(ii)	discharge of pollutants or hazardous chemicals;
	(iii)	industrial accidents;
	(iv)	failure of processing and mining equipment;
	(v)	labour disputes;
	(vi)	supply problems and delays;
	(vii)	encountering unusual or unexpected geologic formations or other geological or grade problems;
	(viii)	encountering unanticipated ground or water conditions;
	(ix)	cave-ins, pit wall failures, flooding, rock bursts and fire;
	(x)	periodic interruptions due to inclement or hazardous weather conditions;
	(xi)	equipment breakdown;
	(xii)	other unanticipated difficulties or interruptions in development, construction or production;
	(xiii)	other acts of God or unfavourable operating conditions; and
	(xiv)	health and safety risks associated with spread of COVID-19 pandemic, and any future emergence and spread of similar pathogens.

Such risks could result in damage to, or destruction of, mineral properties or processing facilities, personal injury or death, loss of key employees, environmental damage, delays in mining, monetary losses and possible legal


	Management’s Discussion and Analysis	Page 37

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Year Ended March 31, 2021

(Expressed in thousands of U.S. dollars, except per share data or unless otherwise stated)

liability. Satisfying such liabilities may be very costly and could have a material adverse effect on the Company’s future cash flow, results of operations and financial condition.

Cybersecurity Risks

The Company is subject to cybersecurity risks including unauthorized access to privileged information, destroy data or disable, degrade or sabotage our systems, including through the introduction of computer viruses. Although we take steps to secure our configurations and manage our information system, including our computer systems, internet sites, emails and other telecommunications, and financial/geological data, there can be no assurance that measures we take to ensure the integrity of our systems will provide protection, especially because cyberattack techniques used change frequently or are not recognized until successful. The Company has not experienced any material cybersecurity incident in the past, but there can be no assurance that the Company would not experience in the future. If our systems are compromised, do not operate properly or are disable, we could suffer financial loss, disruption of business, loss of geology data which could affect our ability to conduct effective mine planning and accurate mineral resources estimates, loss of financial data which could affect our ability to provide accurate and timely financial reporting.

General Economic Conditions

General economic conditions may adversely affect our growth, profitability and ability to obtain financing. Events in global financial markets in the past several years have had a profound impact on the global economy. Many industries, including the silver and gold mining industry, have been and continue to be impacted by these market conditions. Some of the key impacts of the current financial market turmoil include contraction in credit markets resulting in a widening of credit risk, devaluations, high volatility in global equity, commodity, foreign exchange and precious metal markets and a lack of market confidence and liquidity. A continued or worsened slowdown in the financial markets or other economic conditions, including but not limited to, consumer spending, employment rates, business conditions, inflation, fuel and energy costs, consumer debt levels, lack of available credit, the state of the financial markets, interest rates and tax rates, may adversely affect our growth, profitability and ability to obtain financing. A number of issues related to economic conditions could have a material adverse effect on our business, financial condition and results of operations, including:


	(i)	significant disruption to the global economic conditions caused by COVID-19 as discussed above;
	(ii)	contraction in credit markets could impact the cost and availability of financing and our overall liquidity;
	(iii)	the volatility of silver, gold and other metal prices would impact our revenues, profits, losses and cash flow;
	(iv)	recessionary pressures could adversely impact demand for our production;
	(v)	volatile energy, commodity and consumables prices and currency exchange rates could impact our production costs; and
	(vi)	the devaluation and volatility of global stock markets could impact the valuation of our equity and other securities.


18.	Corporate Governance, Safety, Environment ad Social Responsibility

The Company is committed to the principles of sustainable development and conducting our activities in an environmentally and socially responsible manner. Our core environmental, social, governance (“ESG”) values are: caring for the environment in which we operate; contributing to the long-term development of our host communities; ensuring safe and secure workplaces for our employees; and contributing to the welfare of our employees, local communities, and governments; and operating transparently.

Our inarguable sustainability report (the “Sustainability Report”) released on December 16, 2020 is available on our website at www.silvercorp.ca, and the Company plans to release an updated Fiscal 2021 sustainable report in the second quarter of Fiscal 2022.


(a)	Governance

Our Board oversees the direction and strategy of the business and the affairs of the Company. The Board is


	Management’s Discussion and Analysis	Page 38

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Year Ended March 31, 2021

(Expressed in thousands of U.S. dollars, except per share data or unless otherwise stated)

comprised of five directors, and as at March 31, 2021 and the date of this MD&A, four of them are independent, and one is female. The Board’s wealth of experience allows it to effectively oversee the development of corporate strategies and the key risks of the business, provide management with long-term direction, consider and approve major decisions, oversee the business generally and evaluate corporate performance. The Corporate Governance and Nominating Committee, appointed by the Board, oversee the effective functioning of the Board and the implementation of governance best practices.

We believe that good corporate governance is essential to the effective performance of the Company and plays a significant role in protecting the interests of all stakeholders, while helping to maximize value.


(b)	Health, Safety, and Environment

The Company prioritizes environmental protection, as well as ensuring a safe workplace for all employees and contractors at all of our sites. These corporate philosophies tie directly into the emphasis on efficient process design and management across all aspects of the operation. Significant, ongoing efforts are made to identify and minimize risks, as well as streamline the collection, monitoring and reporting of data. An information technology application that was developed in-house in 2014, the “Enterprise-Blog”, is an instrumental tool used to ensure all mandatory procedures are being performed. In addition, an on-line, real time, monitoring and GPS system was established to further the goal of creating an “intelligent mine”.

The Company has remained focused on sustainable development since its inception and is dedicated to fulfilling our environmental goals and responsibilities for the communities where it operates. Silvercorp is committed to building green mines and employing the latest design, construction and management practices to ensure our mining environment undergoes timely rehabilitation. In addition to the SGX and HZG mines having received the “National Green Mine” certification in 2015, the Company’s TLP, LME, LMW, and HPG mines at the Ying Mining District and the GC Mine also received the “Green Mine” certification in Fiscal 2021.

As part of our objective to minimize the impact our operations have on the environment, the Company strives to reduce its energy and water consumption, and to minimize the negative impact on of greenhouse gas emissions and water quality.

The Company is deeply committed to protecting the health, safety and well-being of our employees, contractors, suppliers, and communities where we operate. The Company believes that operating safe mines and building a culture of safety are directly related to our operational success and the ability to create long-term value for all our stakeholders. Training for new workers and ongoing training programs are a priority and Silvercorp continuously reviews and refines all standard procedures at our facilities to identify any potential risks associated with each step of the operation.

Moreover, in response to health risks associated with the spread of COVID-19, the Company implemented a number of health and safety measures designed to protect employees at its operations and no cases were reported.


(c)	Social Responsibility and Economic Value

The Company is committed to creating sustainable value in the communities where our people work and live. Guided by research conducted by our local offices, the Company participates in, and contributes to numerous community programs that typically center on education and health, nutrition, environmental awareness, local infrastructure and fostering additional economic activity. In addition to the taxes and fees paid to various levels of government in China, in Fiscal 2021, the Company:

promoted community health and poverty reduction in the local community, with an emphasis on children and seniors, with periodic visits and subsidies;
donated $0.1 million to institutions in scholarship or education assistance programs to support children’s education at the local and national levels;
donated $0.2 million to the local community and government as part of the Company’s effort to help improve local infrastructure and environmental protection.


	Management’s Discussion and Analysis	Page 39

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Year Ended March 31, 2021

(Expressed in thousands of U.S. dollars, except per share data or unless otherwise stated)


19.	Disclosure Controls and Procedures

Disclosure controls and procedures are designed to provide reasonable assurance that material information is gathered and reported to senior management, including the Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”), as appropriate to allow for timely decision about public disclosure.

Management, including the CEO and CFO, has evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of March 31, 2021, as defined in the rules of the U.S. Securities and Exchange Commission and Canadian Securities Administration. The evaluation included documentation review, enquiries and other procedures considered by management to be appropriate in the circumstances. Based on this evaluation, management concluded that the disclosure controls and procedures (as defined in Rule 13a-15(e) under Securities Exchange Act of 1934) are effective in providing reasonable assurance that the information required to be disclosed in annual filings, interim filings, and other reports the Company filed or submitted under United States and Canadian securities legislation were recorded, processed, summarized and reported within the time periods specified in those rules.


20.	Management’s Report on Internal Control over Financial Reporting

Management of the Company is responsible for establishing and maintaining an adequate system of internal control over financial reporting, and used the Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) to evaluate, with the participation of the CEO and CFO, the effectiveness of internal controls. The Company’s internal control over financial reporting includes:

maintaining records, that in reasonable detail, accurately and fairly reflect our transactions and dispositions of the assets of the Company;
providing reasonable assurance that transactions are recorded as necessary for preparation of our consolidated financial statements in accordance with generally accepted accounting principles;
providing reasonable assurance that receipts and expenditures are made in accordance with authorizations of management and the directors of the Company; and
providing reasonable assurance that unauthorized acquisition, use or disposition of company assets that could have a material effect on the Company’s consolidated financial statements would be prevented or detected on a timely basis.

Based on this evaluation, management concluded that the Company’s internal control over financial reporting based on the criteria set forth in Internal Control – Integrated Framework (2013) issued by COSO was effective as of March 31, 2021 and provided a reasonable assurance of the reliability of the Company’s financial reporting and preparation of the financial statements.

No matter how well a system of internal control over financial reporting is designed, any system has inherent limitations. Even systems determined to be effective can provide only reasonable assurance of the reliability of financial statement preparation and presentation. Also, controls may become inadequate in the future because of changes in conditions or deterioration in the degree of compliance with the Company’s policies and procedures.

The effectiveness of the Company’s internal control over financial reporting as of March 31, 2021 has been audited by Deloitte LLP, the Company’s independent registered public accounting firm, who has also issued a report on the internal controls over financial reporting including with our annual consolidated financial statements.


21.	Changes in Internal Control over Financial Reporting

There has been no change in the Company’s internal control over financial reporting during the fiscal year ended March 31, 2021 that has materially affected or is reasonably likely to materially affect, its internal control over financial reporting.


	Management’s Discussion and Analysis	Page 40

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Year Ended March 31, 2021

(Expressed in thousands of U.S. dollars, except per share data or unless otherwise stated)


22.	Directors and Officers

As at the date of this MD&A, the Company’s directors and officers are as follows:


Directors	Officers
Dr. Rui Feng, Director, Chairman	Rui Feng, Chief Executive Officer
Yikang Liu, Director	Derek Liu, Chief Financial Officer
Paul Simpson, Director	Yong-Jae Kim, General Counsel & Corporate Secretary
David Kong, Director	Lon Shaver, Vice President
Marina A. Katusa, Director

Technical Information

Scientific and technical information contained in this MD&A has been reviewed and approved by Mr. Guoliang Ma, P.Geo., Manager of Exploration and Resources of the Company and a Qualified Person as such term is defined in NI 43-101.

Forward Looking Statements

Certain of the statements and information in this MD&A constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and “forward-looking information” within the meaning of applicable Canadian provincial securities laws. Any statements or information that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects”, “is expected”, “anticipates”, “believes”, “plans”, “projects”, “estimates”, “assumes”, “intends”, “strategies”, “targets”, “goals”, “forecasts”, “objectives”, “budgets”, “schedules”, “potential” or variations thereof or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements or information. Forward-looking statements or information relate to, among other things:

the price of silver and other metals;
estimates of the Company’s revenues and capital expenditures;
estimated ore production and grades from the Company’s mines in the Ying Mining District and the GC Mine;
projected cash operating costs and all-in sustaining costs, and budgets, on a consolidated and mine-by-mine basis;
statements regarding anticipated exploration, drilling, development, construction, and other activities or achievements of the Company;
plans, projections and estimates included in the Fiscal 2021 Guidance and the Fiscal 2022 Guidance;
timing of national security clearance related to acquisition of the Zhonghe Project by the relevant governmental authorities and the Company’s expectation that it will enter into the mineral rights transfer contract with respect to the Zhonghe Project; and
timing of receipt of permits and regulatory approvals.

Forward-looking statements or information are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those reflected in the forward-looking statements or information, including, without limitation, risks relating to,

COVID–19;
fluctuating commodity prices;
fluctuating currency exchange rates;
increasing labour cost;
exploration and development programs;


	Management’s Discussion and Analysis	Page 41

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Year Ended March 31, 2021

(Expressed in thousands of U.S. dollars, except per share data or unless otherwise stated)

feasibility and engineering reports;
permits and licenses;
operations and political conditions;
regulatory environment in China and Canada;
environmental risks;
mining operations;
cybersecurity;
general economic conditions; and
matters referred to in this MD&A under the heading “Risks and Uncertainties” and other public filings of the Company.

This list is not exhaustive of the factors that may affect any of the Company’s forward-looking statements or information. Forward-looking statements or information are statements about the future and are inherently uncertain, and actual achievements of the Company or other future events or conditions may differ materially from those expressed or implied in the forward-looking statements or information. Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated, described or intended. Accordingly, readers should not place undue reliance on forward-looking statements or information.

The Company’s forward-looking statements and information are necessarily based on a number of estimates, assumptions, beliefs, expectations and opinions of management as of the date of this MD&A that, while considered reasonable by management of the Company, are inherently subject to significant business, economic and competitive uncertainties and contingencies. These estimates, assumptions, beliefs, expectations and options include, but are not limited to, those related to the Company’s ability to carry on current and future operations, including: the duration and effects of COVID-19 on our operations and workforce; development and exploration activities; the timing, extent, duration and economic viability of such operations; the accuracy and reliability of estimates, projections, forecasts, studies and assessments; the Company’s ability to meet or achieve estimates, projections and forecasts; the availability and cost of inputs; the price and market for outputs; foreign exchange rates; taxation levels; the timely receipt of necessary approvals or permits; the ability to meet current and future obligations; the ability to obtain timely financing on reasonable terms when required; the current and future social, economic and political conditions; and other assumptions and factors generally associated with the mining industry.

Other than as required by applicable securities laws, the Company does not assume any obligation to update forward-looking statements and information if circumstances or management’s assumptions, beliefs, expectations or opinions should change, or changes in any other events affecting such statements or information. For the reasons set forth above, investors should not place undue reliance on forward-looking statements and information.


	Management’s Discussion and Analysis	Page 42

EX-99.6 7 exhibit99-6.htm CONSENT OF DELOITTE LLP Exhibit 99.6

Exhibit 99.6

CONSENT OF INDEPENDENT REGISTERED ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement No. 333-162546 on Form S-8 and Registration Statement No. 333-249939 on Form F-10 of our reports dated May 20, 2021 relating to the financial statements of Silvercorp Metals Inc. (the “Company”) and the effectiveness of the Company’s internal control over financial reporting appearing in this Current Report, dated May 20, 2021, on Form 6-K of the Company for the year ended March 31, 2021.

/s/ Deloitte LLP

Chartered Professional Accountants
Vancouver, Canada
May 20, 2021

EX-99.7 8 exhibit99-7.htm CONSENT OF GUOLIANG MA Exhibit 99.7

Exhibit 99.7

CONSENT OF EXPERT

The undersigned hereby consents to the inclusion in the Management's Discussion & Analysis of Silvercorp Metals Inc. (the "Company") for the period ended March 31, 2021 of references to the undersigned as a qualified person and the undersigned's name with respect to the disclosure of technical and scientific information contained therein.

The undersigned further consents to the inclusion or incorporation by reference of all references to the undersigned in the Company's Registration Statements on Form F-10 (No. 333-249939). This consent extends to any amendments to the Form F-10, including post-effective amendments.

"Guoliang Ma"
Guoliang Ma, P.Geo.
May 20, 2021

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