Exhibit 99.2
Exhibit 99.2
SILVERCORP METALS INC.
Suite 1750 – 1066 West
Hastings Street
Vancouver, British Columbia
Canada V6E 3X1
NOTICE OF ANNUAL GENERAL
MEETING AND
MANAGEMENT INFORMATION CIRCULAR
FOR THE 2023 ANNUAL GENERAL MEETING OF SHAREHOLDERS
TO BE HELD AT 9:00 A.M. ON SEPTEMBER 29, 2023
DATED AUGUST 11, 2023
SILVERCORP METALS INC.
Suite 1750 – 1066 West
Hastings Street
Vancouver, British Columbia
Canada V6E 3X1
NOTICE OF ANNUAL GENERAL MEETING
OF SHAREHOLDERS
NOTICE
IS HEREBY GIVEN that the annual general meeting (the “Meeting”)
of the shareholders (the “Shareholders”) of Silvercorp Metals Inc. (the “Company”)
will be held at Oceanic Plaza, Suite 1750, 1066 West Hastings Street, Vancouver, British Columbia, V6E 3X1, Canada on Friday, September
29, 2023 at 9:00 a.m. (Vancouver time), and at any adjournment or postponement thereof, for the following purposes:
| 1. | to receive and consider the audited annual consolidated financial statements of the Company for the year
ended March 31, 2023, together with the auditor’s report thereon; |
| 2. | to set the number of directors at six (6); |
| 3. | to elect directors of the Company for the ensuing year; |
| 4. | to re-appoint Deloitte LLP, Independent Registered Public Accounting Firm, as auditor of the Company for
the ensuing year, and to authorize the directors to fix their remuneration; and |
| 5. | to transact such other business as may properly be brought before the Meeting, or at any adjournment(s) thereof. |
The record date for the notice and for voting
at the Meeting is August 11, 2023. Only registered shareholders at the close of business on August 11, 2023 are entitled to receive
notice of and vote at the Meeting, or at any adjournments thereof.
Registered Shareholders are entitled to vote at
the Meeting either in person or by proxy. Registered Shareholders who are unable to attend the Meeting are requested to read, complete,
sign, date and return the accompanying form of proxy and deliver it to the Company’s transfer agent, Computershare Investor Services
Inc., in accordance with the instructions set out in the form of proxy and the Information Circular accompanying this notice.
Shareholders who hold their shares in the Company
through a broker or intermediary are not registered Shareholders, and should refer to the accompanying Information Circular for instructions
on how to vote their shares.
The Company has elected to use the notice and
access model provided for under National Instrument 54-101 – Communication with Beneficial Owners of Securities of a Reporting
Issuer and National Instrument 51-102 – Continuous Disclosure Obligations for distribution of the Meeting materials to
registered and beneficial Shareholders. The Company will deliver this notice, the Information Circular, and the form of proxy or
voting instruction form, as applicable (collectively, the “Meeting Materials”) to Shareholders by posting the Meeting Materials
at http://www.envisionreports.com / https://silvercorpmetals.com/AGM2023. The Meeting Materials will be posted on this website
on August 22, 2023, and will be available thereon for one year following the date of this notice. In addition, the Meeting Materials are
available on the Company’s profile on SEDAR+ at www.sedarplus.ca. Please review the information carefully before voting.
Notice and Access is an environmentally friendly and cost-effective
way to distribute these materials since it reduces printing, paper and postage.
If you have any questions call toll free: 1-866-964-0492
or email www.computershare.com/noticeandaccess to find out more about notice and access.
Shareholders who wish to receive paper copies
of the Meeting Materials may request copies by calling toll free in North America 1-866-962-0498 or direct, from outside of North America,
by calling 514-982-8716 and entering your control number as indicated on your proxy or voting instruction form. Meeting Materials will
be sent to such Shareholders at no cost to them within three business days of their request if such requests are made before the Meeting.
To obtain paper copies of the Meeting Materials after the Meeting, please call 1-888-224-1881.
DATED at Vancouver, British Columbia, this
11th day of August 2023
| |
BY ORDER OF THE BOARD OF DIRECTORS |
| |
|
| |
“Rui Feng” |
| |
|
| |
Dr. Rui Feng |
| |
Chairman, CEO and Director |
| |
Silvercorp Metals Inc. |
MANAGEMENT INFORMATION CIRCULAR
TABLE OF CONTENTS
| SOLICITATION OF PROXIES |
5 |
| NOTICE AND ACCESS |
5 |
| PROXY INSTRUCTIONS |
6 |
| REVOCATION OF PROXIES |
6 |
| HOW TO VOTE |
7 |
| VOTING OF SHARES AND EXERCISE OF DISCRETION BY PROXYHOLDERS |
8 |
| INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON |
8 |
| RECORD DATE, VOTING SHARES, AND PRINCIPAL SHAREHOLDERS |
8 |
| PARTICULARS OF MATTERS TO BE ACTED UPON |
9 |
| RECEIVING THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS |
9 |
| NUMBER OF DIRECTORS |
9 |
| ELECTION OF DIRECTORS |
9 |
| APPOINTMENT OF AUDITOR |
16 |
| CORPORATE GOVERNANCE |
17 |
| CORPORATE GOVERNANCE COMMITTEE |
17 |
| COMPENSATION COMMITTEE |
17 |
| AUDIT COMMITTEE |
18 |
| SUSTAINABILITY COMMITTEE |
18 |
| EXECUTIVE COMPENSATION |
19 |
| EQUITY COMPENSATION PLANS |
31 |
| INDEBTEDNESS OF DIRECTORS, EXECUTIVE OFFICERS, AND SENIOR OFFICERS |
36 |
| MANAGEMENT CONTRACTS |
36 |
| INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS |
36 |
| AUDITOR |
36 |
| ADDITIONAL INFORMATION |
36 |
| BOARD APPROVAL |
36 |
| SCHEDULE “1” |
THE BOARD OF DIRECTORS CHARTER |
39 |
| SCHEDULE “2” |
CORPORATE GOVERNANCE COMMITTEE CHARTER |
40 |
| SCHEDULE “3” |
COMPENSATION COMMITTEE CHARTER |
41 |
| SCHEDULE “4” |
AUDIT COMMITTEE CHARTER |
42 |
| SCHEDULE “5” |
SUSTAINABILITY COMMITTEE CHARTER |
44 |
| EXHIBIT “A” |
CORPORATE GOVERNANCE DISCLOSURE |
46 |
MANAGEMENT INFORMATION CIRCULAR
FOR THE 2023 ANNUAL GENERAL MEETING OF SHAREHOLDERS
TO BE HELD AT 9:00 A.M. ON SEPTEMBER 29, 2023
Unless otherwise noted, the information in this
management information circular (“Information Circular”) is given as at August 11, 2023.
This Information Circular is furnished in connection
with the solicitation of proxies by the management (the “Management”) of Silvercorp Metals Inc. for use at the annual
general meeting (the “Meeting”) of the shareholders of the Company (the “Shareholders”), to be held
at the time and place and for the purposes set forth in the accompanying notice of Meeting (“Notice of Meeting”) and
at any adjournments thereof. In this Information Circular, references to the “Company”, “we”, “our”
and “Silvercorp” refer to Silvercorp Metals Inc. and its subsidiaries, unless stated otherwise. “Common Shares”
means common shares without par value in the capital of the Company. “Options” and “RSUs” means
the stock options and the restricted share units, respectively, granted to the directors, officers, employees, and consultants of the
Company in accordance with the terms of the Company’s amended and restated share-based compensation plan (the “Omnibus Plan”).
All currency amounts stated herein are expressed in lawful currency of the United States, unless otherwise specified.
SOLICITATION OF PROXIES
This solicitation is made on behalf of Management
of the Company. Solicitation of proxies will be conducted by mail and may be supplemented by telephone or other personal contact to be
made without special compensation by directors, officers, and employees of the Company or by the Company’s registrar and transfer
agent. All costs of solicitation will be borne by the Company. The principal executive office of the Company is located at Suite 1750
– 1066 West Hastings Street, Vancouver, British Columbia, Canada, V6E 3X1. The telephone number is (604) 669-9397, toll free telephone
number is 1-888-224-1881, and facsimile number is (604) 669-9387. The Company’s website address is www.silvercorp.ca. The information
on this website is not incorporated by reference into this Information Circular. The registered and records office of the Company is located
at Suite 1750 – 1066 West Hastings Street, Vancouver, British Columbia, Canada, V6E 3X1.
NOTICE AND ACCESS
The Company has elected to use the notice and
access model (“Notice and Access”) provided for under National Instrument 54-101 – Communication with Beneficial
Owners of Securities of a Reporting Issuer (“NI 54-101”) and National Instrument 51-102 – Continuous Disclosure
Obligations (“NI 51-102”) for distribution of the Notice of Meeting, the form of proxy (the “Proxy”)
or voting information form (the “Voting Instruction Form”), as applicable, and this Information Circular (collectively,
the “Meeting Materials”) to both Registered Shareholders and Non-Registered Shareholders (each as defined below).
Under Notice and Access, instead of receiving
a printed copy of the Meeting Materials, Shareholders receive a notice (the “Notice-and-Access Notification”) with
information as to the date, location and purpose of the Meeting, as well as information on how they may access the Meeting Materials electronically.
The Company adopted this alternative means of delivery for the Meeting Materials in order to reduce paper use, and the printing and mailing
costs.
As described in the Notice-and-Access Notification
mailed to the Shareholders, the Company will, in accordance with NI 54-101 and NI 51-102, deliver the Meeting Materials to Shareholders
by posting them at www.envisionreports.com/SilvercorpMetalsAGM2023 on August 22, 2023. The Meeting Materials will remain on this website
for one year following the date of this notice. In addition, the Meeting Materials are available on the Company’s profile on the
System for Electronic Document Analysis and Retrieval (“SEDAR+”) at www.sedarplus.ca.
Shareholders who wish to receive paper copies
of the Meeting Materials or audited financial statements may request copies by calling toll free in North America 1-866-962-0498 or direct,
from outside of North America, by calling 514-982-8716 and entering your control number as indicated on your Proxy or Voting Instruction
Form. Meeting Materials and/or audited financial statements will be sent to such Shareholders at no cost to them within three business
days of their request if such requests are made before the Meeting. To obtain paper copies of the Meeting Materials after the Meeting,
please call 1-888-224-1881.
If you have any questions, please call toll free
1-866-964-0492 or email www.computershare.com/noticeandaccess to find out more about Notice and Access.
The Company anticipates that Notice and Access
will directly benefit the Company through reductions in paper use, postage and printing costs.
Shareholders are reminded
to access and review all of the information contained in the Information Circular carefully before voting.
PROXY INSTRUCTIONS
Appointment of Proxyholder(s)
The persons named in the Proxy are directors and/or
officers of the Company (“Management Designee”). A Registered Shareholder has the right to appoint a different person or
company, who need not be a Shareholder, as proxyholder/alternate proxyholder to represent the Registered Shareholder at the Meeting by
striking out the names of the persons named in the Proxy and inserting the name of that other person or company in the blank space provided.
If you leave the space on the Proxy blank, those directors and/or officers named on the Proxy will be appointed to act as your proxyholder.
The Proxy must be signed in writing by the Registered
Shareholder, or such Registered Shareholder’s attorney duly authorized in writing. If signed by a duly authorized attorney, the
Proxy must be accompanied by the original power of attorney or a notarial certified copy thereof. If the Registered Shareholder is a corporation,
the Proxy must be in writing signed by an officer or attorney of the corporation duly authorized by resolutions of the directors of such
corporation, which resolutions must accompany such Proxy.
A Proxy will only be valid if it is duly completed,
signed, dated and received at the Company’s registrar and transfer agent, Computershare Investor Services Inc. (“Computershare),
in accordance with the instructions provided on the Proxy, not less than forty-eight (48) hours (excluding Saturdays, Sundays and
statutory holidays) prior to the time set for the holding of the Meeting, unless the Chairman of the Meeting elects to exercise his discretion
to accept proxies received subsequently.
Late proxies may be accepted or rejected by the
Chairman of the Meeting at his discretion. The Chairman of the Meeting is under no obligation to accept or reject any particular late
proxy. The Chairman of the Meeting may waive or extend the proxy cut-off without notice.
REVOCATION OF PROXIES
A Registered Shareholder may revoke a Proxy by
delivering an instrument in writing executed by the Registered Shareholder or by the Registered Shareholder’s attorney authorized
in writing, or where the Registered Shareholder is a corporation, by a duly authorized officer or attorney of the corporation, either
at the office of the Company at any time up to and including the last business day preceding the day of the Meeting, or with the consent
of the Chairman of the Meeting, on the day of the Meeting or on the day of any adjournment thereof, before any vote in respect of which
the Proxy is to be used shall have been taken. A Registered Shareholder may also revoke a Proxy by depositing another properly executed
Proxy bearing a later date with the Company’s registrar and transfer agent in the manner described above, or in any other manner
permitted by law. A revocation of a Proxy does not affect any matter on which a vote has been taken prior to such revocation.
Only Registered Shareholders have the right to
revoke a Proxy. Non-Registered Shareholders (as defined below) who wish to change their voting instructions must, in sufficient time in
advance of the Meeting, arrange for the Company (where the Non-Registered Shareholder is a NOBO (as defined below)) or their Intermediaries
(where the Non-Registered Shareholder is an OBO (as defined below)) to change their vote and, if necessary, revoke their Proxy.
HOW TO VOTE
Only Shareholders whose name appears on the records
of the Company’s central security register (“Registered Shareholders”) as of the Record Date (as defined below)
or their duly appointed proxyholders are permitted to vote at the Meeting. Non-Registered Shareholders (as defined below) are not permitted
to vote at the Meeting unless they follow the instructions set forth below.
Registered Shareholders: If you
are a Registered Shareholder, you may vote by attending the Meeting in person, or if you do not plan to attend the Meeting, by completing
the Proxy and delivering it according to the instructions contained in the Proxy and this Information Circular. If you intend to attend
the Meeting and vote your Common Shares in person, you do not need to complete a Proxy.
Non-Registered Shareholders: Most
Shareholders are “non-registered” shareholders (“Non-Registered Shareholders”), meaning the Common Shares
they own are not registered in their names but are instead registered in the name of the brokerage firm, bank or trust company through
which they purchased the Common Shares. Common Shares beneficially owned by a Non-Registered Shareholder are registered either: (i) in
the name of an intermediary (an “Intermediary”) that the Non-Registered Shareholder deals with in respect of the Common
Shares (Intermediaries include, among others, banks, trust companies, securities dealers or brokers and trustees or administrators of
self-administered RRSPs, RRIFs, RESPs and similar plans); or (ii) in the name of a clearing agency (such as CDS Clearing and Depository
Services Inc. or The Depository Trust & Clearing Corporation) of which the Intermediary is a participant.
If you are a Non-Registered Shareholder, the documents
that you receive, and who you receive them from, will vary depending upon whether you are a “non-objecting beneficial owner”
(a “NOBO”), which means you have provided instructions to your Intermediary that you do not object to the Intermediary
disclosing beneficial ownership information about you to the Company for certain purposes, or an “objecting beneficial owner”
(an “OBO”), which means that you have provided instructions to your Intermediary that you object to the Intermediary
disclosing such beneficial ownership information. In either case, you have the right to exercise voting rights attached to the Common
Shares beneficially owned by you, including the right to attend and vote the Common Shares directly at the Meeting, if you follow the
procedures outlined below.
Non-Objecting Beneficial Owners:
If you are a NOBO, and unless you have previously informed your Intermediary that you do not wish to receive materials relating to the
Meeting, you should receive or have already received from the Company or its agent a Notice-and-Access Notification and a Voting Instruction
Form pursuant to NI 54-101. These security holder materials are being sent to both Registered Shareholders and Non-Registered Shareholders.
If you are a Non-Registered Shareholder and the Company or its agent has sent these materials directly to you, your name and address and
information about your holdings of Common Shares have been obtained in accordance with applicable securities regulatory requirements from
the Intermediary holding the Common Shares on your behalf. By choosing to send these materials to you directly, the Company (and not the
Intermediary holding the Common Shares on your behalf) has assumed responsibility for (i) delivering these materials to you, and (ii)
executing your proper voting instructions. Please return your voting instructions as specified in the Voting Instruction Form.
If you wish to attend the Meeting and vote in
person, write your name in the place provided for that purpose in the Voting Instruction Form provided to you and we will deposit it with
our transfer agent, or, if you request on the Voting Instruction Form, we will send you a Proxy that will grant you or your appointee
the right to attend the Meeting and vote in person. If you do not intend to attend the Meeting or have an appointee do so on your behalf
but you wish your Common Shares to be voted, please complete and return the information requested in the Voting Instruction Form to provide
your specific voting instructions. If you do not return your voting instructions as specified in the Voting Instruction Form, your Common
Shares will not be voted.
Objecting Beneficial Owners: The
Company does not intend to pay for Intermediaries to forward the proxy-related materials and Form 54-101F7 – Request for Voting
Instructions Made by Intermediary to Non-Registered Shareholders who are OBOs under NI 54-101. OBOs will not receive the materials
unless the OBO’s Intermediary assumes the cost of delivery. If you receive or have already received from your Intermediary either
a Voting Instruction Form or a Proxy,
follow the instructions provided in order to ensure
your Common Shares are voted in accordance with your instructions. Intermediaries have their own mailing procedures and provide their
own instructions. These procedures may allow for providing voting instructions by telephone, on the Internet, by mail or by fax. If you
wish to vote in person at the Meeting, you should follow the procedure in the instructions provided by or on behalf of your Intermediary
and insert your name in the space provided on the Voting Instruction Form or Proxy or request a form of legal proxy which will grant you
the right to attend the Meeting and vote in person.
The purpose of the above procedures is to permit
Non-Registered Shareholders to direct the voting of the Common Shares they beneficially own. In either case, Non-Registered Shareholders
should carefully follow the instructions of their Intermediary or the Company, as applicable, including those regarding when and where
the Proxy or Voting Instruction Form is to be delivered.
A Non-Registered Shareholder may revoke a Voting
Instruction Form or any waiver of their right to receive materials relating to a meeting which has been given to an Intermediary at any
time by written notice to the Intermediary. An Intermediary is not required to act on a revocation of a Voting Instruction Form or of
a waiver of the right to receive materials relating to a meeting which is not received by the Intermediary at least seven days prior to
the Meeting.
VOTING OF SHARES AND EXERCISE OF DISCRETION
BY PROXYHOLDERS
If you complete your Proxy properly, then the
nominee named in your Proxy will vote or withhold from voting the Common Shares represented by the Proxy in accordance with your instructions
on any ballot that may be called for and, if you specify a choice with respect to any matter to be acted upon, your Common Shares will
be voted accordingly. If you do not specify a choice on any given matter to be voted upon, your Common Shares will be voted in favour
of such matter. The Proxy grants the nominee the discretion to vote on amendments or variations to matters identified in the Notice
of Meeting and with respect to other matters that may properly come before the Meeting. If any such amendments or variations are proposed
to the matters described in the Notice of Meeting, or any other matters properly come before the Meeting, your proxyholder may vote your
Common Shares as he or she considers best.
INTEREST OF CERTAIN PERSONS IN MATTERS TO
BE ACTED UPON
No Person has any material interest, direct or
indirect, by way of beneficial ownership of securities or otherwise, in any matter to be acted upon at the Meeting other than the election
of directors or the appointment of auditor. For the purpose of this paragraph, “Person” shall include each person: (a) who
has been a director or executive officer of the Company at any time since the commencement of the Company’s last completed financial year;
(b) who is a proposed nominee for election as a director of the Company; or (c) who is an associate or affiliate of a person included
in subparagraphs (a) or (b).
RECORD DATE, VOTING SHARES, AND PRINCIPAL
SHAREHOLDERS
The directors of the Company have fixed August
11, 2023 as the record date (the “Record Date”) for the determination of Shareholders entitled to receive the Notice
of Meeting and to vote at the Meeting. Any such Registered Shareholder who either personally attends the Meeting, or has completed and
delivered a Proxy in the manner and subject to the provisions described above shall be entitled to vote or to have his or her Common Shares
voted at the Meeting. Non-Registered Shareholders should refer to the instructions above if they wish their Common Shares to be voted
at the Meeting.
The Company is authorized to issue an unlimited
number of Common Shares, each Common Share carrying the right to one vote. As of the Record Date, the Company has issued and outstanding
176,816,488 fully paid and non-assessable Common Shares. The Company has no other classes of shares.
On a show of hands, every individual who is present
as a Registered Shareholder, or as a representative of a Registered Shareholder will have one vote (no matter how many Common Shares such
Registered Shareholder holds). On a poll, every Registered Shareholder present in person or represented by Proxy and every person who
is a representative of a Registered Shareholder will have one vote for each Common Share registered in the name of the Registered Shareholder
on the list of Registered Shareholders, which is available for inspection during normal business hours at Computershare and which will
be available at the Meeting.
To the knowledge of the directors and executive
officers of the Company, there are no persons who, or companies that, beneficially own, or control or direct, directly or indirectly,
Common Shares carrying 10% or more of the voting rights attached to all outstanding Common Shares of the Company.
PARTICULARS OF MATTERS TO BE ACTED UPON
RECEIVING THE AUDITED CONSOLIDATED FINANCIAL
STATEMENTS
The audited consolidated financial statements
of the Company for the year ended March 31, 2023, together with the auditor’s report thereon (the “Financial Statements”)
will be presented to the shareholders at the Meeting. The Financial Statements are available on the Company’s profile on SEDAR+
at www.sedarplus.ca, and www.envisionreports.com/SilvercorpMetalsAGM2023. A paper copy may be requested, at no charge to the shareholder,
by calling the Assistant Corporate Secretary of the Company toll-free at 1-888-224-1881.
NUMBER OF DIRECTORS
The board of directors of
the Company (the “Board”) presently consists of six directors. Management proposes that the number of directors on
the Board be fixed at six (6). Shareholders will therefore be asked at the Meeting to approve an ordinary resolution that the number of
directors elected be fixed at six (6) for the ensuing year, subject to such increases as may be permitted by the Articles of the Company
and the provisions of the Business Corporations Act (British Columbia) (“BCBCA”).
The Board recommends a vote “FOR”
the approval of the resolution setting the number of directors at six (6). In the absence of contrary instructions, the management proxy
nominees named as proxyholders in the enclosed Proxy or Voting Instruction Form will cast the votes represented by any Proxy or Voting
Instruction Form FOR the approval of the resolution setting the number of directors at six (6).
ELECTION OF DIRECTORS
Each director of the Company is elected annually
and holds office until the next annual general meeting of the Shareholders, or until his or her successor is elected or appointed, unless
that person’s office is earlier vacated in accordance with the Articles of the Company or with the provisions of the BCBCA.
Advance Notice Policy
No person will be eligible for election as a director
of the Company unless nominated in accordance with the provisions of the Company’ advance notice policy (the “Advance Notice
Policy”). A copy of the Advance Notice Policy was filed under the Company’s profile on SEDAR+ at www.sedarplus.ca and
is available on the Company’s website at http://www.silvercorp.ca/company/corporate_governance. The Advance Notice Policy provides
that advance notice to the Company must be made in circumstances where nominations of persons for election to the Board are made by Shareholders
other than pursuant to: (i) a “proposal” made in accordance with Division 7 of the BCBCA; or (ii) a requisition of the Shareholders
made in accordance with section 167 of the BCBCA. Among other things, the Advance Notice Policy fixes a deadline by which holders of record
of the Common Shares must submit director nominations to the secretary of the Company prior to any annual or special meeting of Shareholders
and sets forth the specific information that a Shareholder must include in the written notice to the secretary of the Company.
In the case of an annual meeting of Shareholders,
notice to the Company must be made not less than 30 or more than 65 days prior to the date of the annual meeting; provided, however, that
in the event that the annual meeting is to be held on a date that is less than 50 days after the date on which the first public announcement
of the date of the annual meeting was made, notice may be made not later than the close of business on the 10th day following
such public announcement. In the case of a special meeting of Shareholders (which is not also an annual meeting), notice to the Company
must be made not later than the close of business on the 15th day following the day on which the first public announcement
of the date of the special meeting was made.
To be in proper written form, a notice to the
Company nominating a person for election to the Board must include certain information as set forth in the Advance Notice Policy with
respect to the nominee and to the nominating Shareholder. The Board may, in its sole discretion, waive any requirement of the Advance
Notice Policy.
Majority Voting Policy
Management has received written consent from each
of Management’s nominees for election as a director as to their willingness and ability to serve as a director. The Company has
adopted a majority voting policy in accordance with the requirements of the Toronto Stock Exchange (the “TSX”) and
the recommendation of the Canadian Coalition for Good Governance, which means that any director nominee who receives more votes cast as
withheld than voted in favour will tender his or her resignation immediately following the Meeting. The Board will consider the resignation
offer and will determine whether or not to accept it within 90 days following the applicable annual meeting. The Board will be expected
to accept the resignation except in situations where exceptional circumstances warrant the applicable director to continue to serve on
the Board. A copy of the majority voting policy can be found on the Company’s website at http://silvercorp.ca/company/corporate_governance.
Nominees for Election as Directors
At the Meeting, the six
persons named below will be proposed for election to the Board (the “Director Nominees”). Five of the six Director
Nominees (83%) are “independent” within the meaning of National Instrument 52-110 – Audit Committees (“NI 52-110”).
Dr. Rui Feng is not considered to be “independent” as he is the Chief Executive Officer of the Company. Management has received
written consent from each of the Director Nominees as to their willingness and ability to serve as a director. All proposed Director Nominees
were duly elected as director at the last Annual General Meeting of shareholders held on September 30, 2022.
The Board recommends that shareholders vote
FOR the Director Nominees.
In the absence of contrary instructions, the
management proxy nominees named as proxyholders in the enclosed Proxy or Voting Instruction Form will cast the votes represented by any
Proxy or Voting Instruction Form FOR the election of the Director Nominees.
Information regarding the Director Nominees is
set out below.
 |
Dr. Rui Feng
Dr. Rui Feng is a successful entrepreneur, explorer, and mine builder
with over 28 years of global mining industry experience.
Dr. Feng’s passion for discoveries and
mining exploration has led him to explore and acquire mineral opportunities worldwide. He was integral in discovering China Gold
International Resources, formerly Jinshan Gold’s CSH Gold Mine in China in 2002, and New Pacific Metals’ Silver Sand
project in Bolivia in 2017.
Dr. Feng founded Silvercorp in 2003 by acquiring
early-stage properties in China. Through discovery and development, Silvercorp has become one of the most profitable Canadian mining companies,
with multiple mines in China.
In addition to delivering value to shareholders
through mining discovery and development, Dr. Feng firmly believe that a sustainable operation requires technological innovation and effective
management. He pioneered a digital information management tool for Silvercorp’s mines, which has contributed to improved organizational
performance and operational profitability.
Dr. Feng obtain his B.Sc. and M.Sc. degrees in
Geology in China, his Ph. D. in Geological Science from the University of Saskatchewan in Canada in 1992 and received a post-Doctorial
fellowship from National Science and Engineering Council of Canada in 1992.
Dr. Feng supports many community and social causes
through contributions made personally and through the actions of the companies he leads.
|
|
Residence: Beijing, China
Age: 60
Director since: September 2003
Independent: No
Principal Occupation: Chairman and CEO
of the Company |
| Equity Ownership |
| |
Number of
Common Shares |
Number of
Restricted Share Units |
Number of
Options |
| August
11, 2023 |
5,863,000 |
1,483,000 |
370,000 |
| August 15, 2022 |
5,863,000 |
1,033,000 |
320,000 |
| August 15, 2021 |
5,768,000 |
831,500 |
370,000 |
| Director Election – Voting Results |
Areas of Expertise |
| Year |
For |
Withheld |
Strategic Leadership; Mine Production, Operation and Planning; Geological
Exploration; CSR Management and Human Resource Management. |
| 2022 |
96.08% |
3.92% |
| 2021 |
96.95% |
3.05% |
| 2020 |
99.38% |
0.62% |
| Board and Committee Membership and Attendance in Fiscal 2023 |
Other Public Directorships |
|
Board (Chair)
Sustainability committee |
5 of 5
1 of 1 |
New Pacific Metals Corp.
Tincorp Metals Inc. |
| |
|
|
|
|
|
|
 |
Paul Simpson
Mr. Paul Simpson is a Vancouver
based corporate securities lawyer with the firm Armstrong Simpson. Mr. Simpson holds a Certificate in Mining Law from Osgoode Hall Law
School.
Mr. Simpson has over 25 years of experience, predominately advising
public companies with international natural resource property holdings.
|
|
Residence: Vancouver, BC, Canada
Age: 66
Director since: June 2003
Independent: Yes
Principal Occupation: Securities Lawyer |
| Equity Ownership |
| |
Number of
Common Shares |
Number of
Restricted Share Units |
Number of
Options |
| August
11, 2023 |
1,135,151 |
58,333 |
48,000 |
| August 15, 2022 |
1,116,484 |
45,000 |
48,000 |
| August 15, 2021 |
1,094,618 |
43,833 |
18,000 |
| Director Election – Voting Results |
Areas of Expertise |
| Year |
For |
Withheld |
Strategic Leadership; International Business; Mergers and Acquisition;
Mining Industry; Corporate Governance; Health and Safety/Sustainability/Risk Management; Talent Management; Public Relations. |
| 2022 |
91.10% |
8.90% |
| 2021 |
92.94% |
7.06% |
| 2020 |
94.19% |
5.81% |
| Board and Committee Membership and Attendance in Fiscal 2023 |
Other Public Directorships |
|
Board (Independent Lead Director)
Compensation committee (Chair)
Governance committee (Chair)
|
5 of 5
1 of 1
1 of 1
|
N/A |
| |
|
|
|
|
|
|
 |
David Kong
Mr. Kong was a partner at Ernst & Young LLP
from 2005 to 2010.
Mr. Kong has over 25 years of public accounting
experiences in Canada. His professional practice focused on serving Canadian public companies doing business in China and Chinese public
companies listed on the North American stock exchanges.
Mr. Kong holds a Bachelor in Business
Administration, and an ICD.D designation from the Institute of Corporate Directors.
Mr. Kong earned his Chartered Accountant (CPA,
CA) designation in British Columbia in 1978. From 1981 to 2004, he was a partner of Ellis Foster Chartered Accountants
and from 2005 to 2010, a partner at Ernst & Young LLP.
|
|
Residence: Vancouver, BC, Canada
Age: 77
Director since: November 2011
Independent: Yes
Principal Occupation: Corporate Director |
| Equity Ownership |
| |
Number of
Common Shares |
Number of
Restricted Share Units |
Number of
Options |
| August
11, 2023 |
223,500 |
55,000 |
48,000 |
| August
15, 2022 |
203,500 |
45,000 |
48,000 |
| August
15, 2021 |
169,167 |
36,333 |
68,000 |
| Director Election – Voting Results |
Areas of Expertise |
| Year |
For |
Withheld |
Strategic Leadership; International Business; Mining Industry; Merger and Acquisition; Corporate Finance; Accounting and Auditing; Risk Management; Public Company Boards; Corporate Governance. |
| 2022 |
91.41% |
8.59% |
| 2021 |
90.48% |
9.52% |
| 2020 |
90.75% |
9.25% |
| Board and Committee Membership and Attendance in Fiscal 2023 |
Other Public Directorships |
|
Board
Compensation committee
Audit committee (Chair) |
5 of 5
1 of 1
4 of 4 |
Gold Mining Inc.
Uranium Energy Corp. |
| |
|
|
|
|
|
|
 |
Marina A. Katusa
Ms. Katusa has over fifteen years of business
experience in areas including mineral exploration, research analysis, strategic planning, and corporate development.
Ms. Katusa earned a Master of Business Administration
(MBA) degree, and a Bachelor of Science (BSc) degree in Geology/Earth & Ocean Science from the University of British Columbia.
She has been the President and CEO of Canita Consulting
Corporation since 2010. She was a member of the Board of Directors of Family Services of Greater Vancouver from 2016 to 2020, Director
of Corporate Development and Strategy at GCT Global Container Terminals Inc from 2013 to 2017, and the Vice President of Exeter Resource
Corporation from 2012 to 2013.
|
|
Residence: Vancouver, BC, Canada
Age: 39
Director since: September, 2017
Independent: Yes
Principal Occupation: President/CEO of
Canita Consulting Corporation |
| Equity Ownership |
| |
Number of
Common Shares |
Number of
Restricted Share Units |
Number of
Options |
| August
11, 2023 |
139,666 |
58,334 |
48,000 |
| August
15, 2022 |
121,000 |
45,000 |
48,000 |
| August
15, 2021 |
74,134 |
43,833 |
43,000 |
| Director Election – Voting Results |
Areas of Expertise |
| Year |
For |
Withheld |
Strategic
Planning; Corporate Development; International Business; Corporate Finance; Mining Industry and Geology; Sustainability/Risk
Management; ESG; Public Company Boards; Corporate Governance. |
| 2022 |
95.20% |
4.80% |
| 2021 |
97.70% |
2.30% |
| 2020 |
98.75% |
1.25% |
| Board and Committee Membership and Attendance in Fiscal 2023 |
Other Public Directorships |
|
Board
Governance committee
Audit committee
Sustainability committee (Chair) |
5 of 5
1 of 1
4 of 4
1 of 1 |
Osisko Development Corp. |
| |
|
|
|
|
|
|
 |
Yikang Liu
Mr. Yikang Liu is the Past Deputy General Secretary
of the China Mining Association and the 35th & 36th Vice-Chairman of the Geological Society of China.
Before he retired in 2001, Mr. Liu was the Chief
Geologist for the former Ministry of Metallurgical Industry of China. While there, he made significant contributions to the amendment
of the last China Mineral Resources Law. Mr. Liu, representing Chinese interests, is the person responsible for the establishment of the
first Sino-foreign joint venture for mineral exploration in China.
Mr. Liu has over 40 years of geological experience
in managing, evaluating and exploring mineral projects for the Chinese government in China and in many countries around the world including
Bolivia, Ethiopia, Greenland, Iran, Madagascar, Peru, the Philippines and Zambia.
In a mentoring capacity, Mr. Liu was an Adjunct
Professor of Geology at the Changchun College of Technology, Northeast University and the China University of Geoscience.
Silvercorp continues to benefit from the counsel
of Mr. Liu’s expertise in mining development and exploration in China.
|
|
Residence: Beijing China
Age: 81
Director since: July 2006
Independent: Yes
Principal Occupation: Consultant and Corporate
Director. |
| Equity Ownership |
| |
Number of
Common Shares |
Number of
Restricted Share Units |
Number of
Options |
| August 11, 2023 |
102,333 |
55,000 |
48,000 |
| August
15, 2022 |
91,333 |
45,000 |
48,000 |
| August
15, 2021 |
88,000 |
36,333 |
18,000 |
| Director Election – Voting Results |
Areas of Expertise |
| Year |
For |
Withheld |
Strategic Planning; Corporate Development; International Business; Corporate Finance; Mining Industry, Operations, and Geology; Sustainability/Risk Management. |
| 2022 |
98.54% |
1.46% |
| 2021 |
97.75% |
2.25% |
| 2020 |
99.02% |
0.98% |
| Board and Committee Membership and Attendance in Fiscal 2023 |
Other Public Directorships |
|
Board
Compensation committee
Sustainability committee |
5 of 5
1 of 1
1 of 1 |
N/A |
| |
|
|
|
|
|
|
 |
Ken Robertson
Mr. Robertson was a partner, and Global Mining
& Metals Group Leader with Ernst & Young LLP (“EY”). During his career at EY in Canada and the United Kingdom, Mr. Robertson
developed extensive experience in initial public offerings, financings, governance and securities regulatory compliance.
Mr. Robertson is a Chartered Professional Accountant.
Mr. Robertson has over 35 years of public accounting
experiences in Canada and England. Mr. Robertson holds a Bachelor of Commerce degree from McMaster University and the ICD.D designation
from the Institute of Corporate Directors. |
|
Residence: Vancouver, BC, Canada
Age: 68
Director since: proposed Director Nominee
Independent: Yes
Principal Occupation: Corporate Director |
| Equity Ownership |
| |
Number of
Common Shares |
Number of
Restricted Share Units |
Number of
Options |
| August
11, 2023 |
N/A |
40,000 |
10,000 |
| August 15, 2022 |
N/A |
N/A |
N/A |
| August 15, 2021 |
N/A |
N/A |
N/A |
| Director Election – Voting Results |
Areas of Expertise |
| Year |
For |
Withheld |
Strategic Planning; Mining Industry; Merger and Acquisition, Corporate Finance; Accounting and Auditing; Risk Management; Public Company Boards; Corporate Governance. |
| 2022 |
98.62% |
1.38% |
| 2021 |
N/A |
N/A |
| 2020 |
N/A |
N/A |
| Board and Committee Membership and Attendance in Fiscal 2023 |
Other Public Directorships |
Board
Governance committee
Audit committee |
5 of 5
1 of 1
4 of 4 |
Mountain Province Diamonds Inc.
Gold Royalty Corporation |
| |
|
|
|
|
|
|
The
information as to the municipality and province, country of residence, principal occupation, or business or employment and the number
of shares beneficially owned by each nominee or over which each nominee exercise control or direction set out above has been furnished
by the individual nominees as at August 11, 2023.
Silvercorp
confirms that no director, together with his or her associates or affiliates, owns or controls directly or indirectly 10% or more of
the outstanding Common Shares.
No
proposed director:
| (a) | is,
as at the date of this Information Circular, or has been, within 10 years before the date
of this Information Circular, a director, chief executive officer or chief financial officer
of any company (including the Company) that, |
| (i) | was
subject to an order (as defined in Form 51-102F5 Information Circular) that was issued
while the proposed director was acting the capacity as director, chief executive; or |
| (ii) | was
subject to an order (as defined in Form 51-102F5 Information Circular) that was issued
after the proposed director ceased to be a director, chief executive officer or chief financial
officer and which resulted from an event that occurred while that person was acting in the
capacity as director, chief executive officer or chief financial officer, |
| (b) | is,
as at the date of this Information Circular, or has been within the 10 years before the date
of this Information Circular, a director or executive officer of any company (including the
Company) that, while that person was acting in that capacity, or within a year of that person
ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating
to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement
or compromise with creditors or had a receiver, receiver manager or trustee appointed to
hold its assets; or |
| (c) | has,
within 10 years before the date of this Information Circular, become bankrupt, made a proposal
under any legislation relating to bankruptcy or insolvency, or become subject to or instituted
any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager
or trustee appointed to hold the assets of the proposed director. |
No
proposed director has been subject to:
| (a) | any
penalties or sanctions imposed by a court relating to securities legislation or by a securities
regulatory authority or has entered into a settlement agreement with a securities regulatory
authority; or |
| (b) | any
other penalties or sanctions imposed by a court or regulatory body that would likely be considered
important to a reasonable securityholder in deciding whether to vote for a proposed director. |
The
foregoing, not being within the knowledge of the Company, has been furnished by the respective proposed directors themselves.
APPOINTMENT
OF AUDITOR
It
is proposed that Deloitte LLP, Independent Registered Public Accounting Firm, of Vancouver, British Columbia, be re-appointed as the
auditor of the Company to hold office until the next annual general meeting of the Shareholders or until a successor is appointed, and
that the directors be authorized to determine the auditor’s remuneration. Deloitte LLP, Independent Registered Public Accounting
Firm, was first appointed as the auditor of the Company on November 26, 2012.
The
following table shows the fees earned by Deloitte LLP for services for the years ended March 31, 2023 and 2022.
| |
Year
Ended March 31, 2023 |
Year
Ended March 31, 2022 |
| Audit
Fees (1) |
$1,135,000 |
$1,095,000 |
| Audit-Related
Fees (2) |
Nil |
Nil |
| Tax
Fees (3) |
Nil |
Nil |
| All
Other Fees (4) |
Nil |
Nil |
| Total |
$1,135,000 |
$1,095,000 |
Notes:
| (1) | Audit
Fees include fees for services for the audit of annual financial statements and internal
control over financial reporting and the reviews of interim financial statements. |
| (2) | Audi-Related
Fees includes fees for assurance and related services that related to the performance of
the audit or review of the Company’s financial statements and are not related under
above note (1). |
| (3) | Tax
Fees include fees for services for tax compliance, tax advice, and tax planning. |
| (4) | All
Other Fees include fees for services other than the services reported in the above items. |
At
the Meeting, Shareholders will be asked to consider, and if thought advisable, pass an ordinary resolution appointing Deloitte LLP, Independent
Registered Public Accounting Firm, of Vancouver, British Columbia, as auditor of the
Company
until the next annual general meeting of Shareholders, or until a successor is appointed, at a remuneration to be fixed by the Board.
The
Board recommends a vote “FOR” the approval of the resolution appointing Deloitte LLP, Independent Registered Public Accounting
Firm, as auditor of the Company at a remuneration to be fixed by the Board. In the absence of contrary instructions, the management
proxy nominees named as proxyholders in the enclosed Proxy or Voting Instruction Form will cast the votes represented by any Proxy or
Voting Instruction Form FOR the appointment of Deloitte LLP as auditor of the Company, at a remuneration to be fixed by the Board.
CORPORATE
GOVERNANCE
The
Company’s corporate governance practices have been and continue to be in compliance with the applicable Canadian requirements.
The Company continues to monitor developments in Canada with a view to further revising its governance policies and practices, as appropriate.
The
Company has reviewed its corporate governance practices against the requirements of the NYSE American and determined that its corporate
governance practices do not differ significantly from those followed by U.S. companies under the NYSE American listing standards for
corporate governance.
The
following is a description of the Company’s corporate governance practices which has been prepared by the Corporate Governance
Committee of the Board and has been approved by the Board.
Board
of Directors
In
compliance with the requirements of the BCBCA, the directors are elected by the Shareholders to manage, or supervise the Management of
the business and affairs of the Company. In exercising their powers and discharging their duties, the directors are required to act honestly
and in good faith with a view to the best interests of the Company, and to exercise the care, diligence and skill that a reasonably prudent
person would exercise in comparable circumstances. Five out of six of the Director Nominees are independent within the meaning of NI
52-110. One member of Management on the Board, Dr. Rui Feng, is not considered independent as he is the Chief Executive Officer and Chairman
of the Company. The independent directors regularly meet without the members of Management present. Mr. Paul Simpson is the independent
lead director of the Board. The role of the independent lead director is to act as the Chair for all meetings of the independent directors
referred to above.
The
Board has adopted a description of how it delineates its roles and stewardship responsibilities in the Board of Directors Charter, which
is attached hereto as Schedule “1”. This description incorporates the guidelines and principles outlined in NI 52-110,
National Instrument 58-101 - Disclosure of Corporate Governance Practices (“NI 58-101”) and National Policy
58-201 - Corporate Governance Guidelines. The Board believes that good corporate governance is important to the effective performance
of the Company and plays a significant role in protecting Shareholders’ interests and maximizing value for the Shareholders. The
disclosure regarding the Company’s corporate governance practices that is required by NI 58-101 is attached hereto as Exhibit
“A”.
CORPORATE
GOVERNANCE COMMITTEE
The
Corporate Governance Committee is responsible for assisting the Board in establishing and maintaining a sound system of corporate governance
through a process of continuing assessment and enhancement. The Corporate Governance Committee works to ensure that (a) the Board functions
independently of Management, (b) Management is clearly accountable to the Board, and (c) procedures are in place to monitor the effectiveness
of the performance of the Board, the committees of the Board and individual directors. The Corporate Governance Committee is comprised
of Paul Simpson, Marina Katusa, and Ken Robertson, all of whom are independent directors pursuant to NI 52-110. The Corporate Governance
Committee Charter is attached hereto as Schedule “2”.
COMPENSATION
COMMITTEE
The
Compensation Committee is responsible for determining and approving compensation for directors and senior officers. The Compensation
Committee Charter is attached hereto as Schedule “3”. The Compensation Committee is comprised of Paul Simpson, Yikang
Liu, and David Kong, all of whom are independent directors pursuant to NI 52-110.
All
committee members have experience in executive compensation. Paul Simpson is a senior corporate securities lawyer, and also holds a Certificate
in Mining Law from Osgoode Hall Law School. He brings over 25 years’ experience in corporate law and corporate governance as it
relates to compensation committees. Yikang Liu is the past Deputy General Secretary for China Mining Association and former Vice-Chair
of the Geological Society of China. David Kong has over 30 years’ experience as a Chartered Accountant, is a certified director
(ICD.C) of the Institute of Corporate Directors, and acts as a director on a number of publicly listed companies. Given their education
and experience, each member of the Compensation Committee has familiarity with, an understanding of, and experience in reviewing executive
and directors’ compensation; administering of stock options and stock option grants; and reviewing performance goals and assessments
of executives. In Fiscal 2021, the Compensation Committee retained Mercer (Canada) Limited to assist in conducting a market compensation
review to confirm the reasonableness of the CEO’s compensation package relative to other North American mining companies with similar
revenues. In Fiscal 2023, the Compensation Committee conducted its own market research and selected over 7 producing mining companies
with main focus on silver sector as benchmarking. The Company’s compensation policies and programs are designed to be competitive
with publicly listed mining companies of similar size and to recognize and reward executive performance consistent with the success of
the Company’s business.
AUDIT
COMMITTEE
For
information regarding the Audit Committee, see (i) the Company’s annual information form (the “AIF”) dated June
1, 2023, under the heading “Audit Committee”, and (ii) a copy of the Audit Committee Charter which is attached hereto as
Schedule “4”. The Audit Committee is comprised of David Kong, Marina Katusa, and Ken Robertson, all of whom are independent
directors and financially literate within the meaning of NI 52-110. The AIF is available under the Company’s profile at www.sedarplus.ca.
SUSTAINABILITY
COMMITTEE
At
Silvercorp, we strive to operate all aspects of our business in line with the highest safety standards, and in the most efficient and
sustainable way possible. Our focus is on generating sustainable growth through the optimization of innovative technology while operating
in an environmentally responsible way.
Our
Vision:
Be
a technologically advanced, well-managed, and sustainable mining company.
Our
Values:
| ● | Operate
sustainably by prioritizing safety and the environment. |
| ● | Apply
technology and efficient management to ensure our competitiveness. |
| ● | Respect
our people and enable them to achieve their potential. |
| ● | Embody
the principles of honesty and integrity. |
| ● | Strive
to innovate for further excellence. |
Silvercorp
is committed to the principles of sustainable development, safety, and conducting its activities in an environmentally and socially responsible
manner. We believe in caring for the environment in which we operate; contributing to the long-term development of our host communities;
ensuring safe and secure workplaces for employees, local communities and governments; and operating transparently. Maintaining and improving
good relationships and collaboration with the Company’s host communities is essential to achieving our sustainability targets.
Through attentive engagement and collaboration, we understand the social, economic and environmental priorities, and takes actions to
tackle the most pressing issues and risks.
The
Sustainability Committee Charter is attached hereto as Schedule “5”. The Sustainability Committee is comprised of
Marina Katusa, Yikang Liu, and Dr. Rui Feng. Each of the members of the Sustainability Committee, other than Dr. Rui Feng, is independent
pursuant to NI 52-110.
The
Corporate Governance Committee, Compensation Committee, Audit Committee and Sustainability Committee will each be re-constituted after
the Meeting.
EXECUTIVE
COMPENSATION
The
following table sets forth a summary of the total compensation during the three most recently completed financial years paid to the Company’s
Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”), and the three other most highly
compensated executive officers, or the three most highly compensated individuals acting in a similar capacity, other than the CEO and
CFO, at the end of the most recently completed financial year whose total compensation was, individually, more than CAD$150,000, and
any additional individuals who satisfy these criteria but for the fact that individual was not serving as an officer, nor acting in a
similar capacity, at the end of the most recently completed financial year, hereinafter referred to as the “Named Executive
Officers” or the “NEOs”.
Summary
Compensation Table
Name and
Principal Position |
Fiscal
Year |
Salary (1)
($) |
Share-Based
Awards (5)
($) |
Options-
Based
Awards (6)
($) |
Non-Equity Incentive
Plan Compensation
($) |
Pension
Value
($) |
All
Other
Compensation (3)
($) |
Total
Compensation (2)
($) |
Annual
Incentive
Plan |
Long Term
Incentive
Plan |
| Dr.
Rui Feng, Chairman, CEO and Director(4) |
2023 |
900,000 |
1,493,118 |
197,327 |
1,091,000 |
- |
- |
- |
3,681,444 |
| 2022 |
858,375 |
1,539,247 |
- |
1,091,000 |
- |
- |
6,235 |
3,494,857 |
| 2021 |
742,500 |
1,011,074 |
501,959 |
1,039,500 |
- |
- |
143,733 |
3,438,766 |
Derek
Liu,
Chief Financial Officer |
2023 |
232,804 |
207,937 |
58,957 |
139,834 |
- |
- |
- |
639,532 |
| 2022 |
234,525 |
357,371 |
- |
142,948 |
- |
- |
4,719 |
739,563 |
| 2021 |
211,816 |
253,182 |
136,898 |
140,631 |
- |
- |
78,269 |
820,796 |
Lon
Shaver,
Vice President |
2023 |
207,861 |
133,673 |
35,374 |
75,586 |
- |
- |
- |
452,494 |
| 2022 |
209,397 |
280,791 |
- |
58,631 |
- |
- |
4,719 |
553,538 |
| 2021 |
189,122 |
183,075 |
91,265 |
66,193 |
- |
- |
82,051 |
611,706 |
| Lichang Peng, General Manager of China Operations (7) |
2023 |
124,063 |
83,175 |
23,583 |
75,586 |
- |
- |
- |
306,407 |
| 2022 |
89,343 |
142,948 |
- |
61,693 |
- |
- |
- |
293,984 |
| 2021 |
103,208 |
137,575 |
91,265 |
59,464 |
- |
- |
- |
391,512 |
| Song Hong, Deputy Genernal Manager of China Operations (7) |
2023 |
111,510 |
89,116 |
23,583 |
75,586 |
- |
- |
- |
299,795 |
| 2022 |
89,343 |
153,159 |
- |
50,877 |
- |
- |
- |
293,379 |
| 2021 |
89,686 |
109,604 |
91,265 |
52,987 |
- |
- |
15,130 |
358,672 |
| Total |
2023 |
1,576,238 |
2,007,019 |
338,824 |
1,457,592 |
- |
- |
- |
5,379,672 |
| 2022 |
1,480,983 |
2,473,516 |
- |
1,405,149 |
- |
- |
15,673 |
5,375,321 |
| 2021 |
1,336,332 |
1,694,510 |
912,652 |
1,358,775 |
- |
- |
319,183 |
5,621,452 |
Notes:
| (1) | Includes
consulting fees paid to NEOs. |
| (2) | Other
than the consulting fees and annual incentive compensation paid to Dr. Rui Feng, the amounts
paid to the NEOs were in Canadian dollars and converted into US dollars using the average
exchange rate as per Bank of Canada for the corresponding fiscal year. |
| (3) | For
fiscal 2021, all other compensation includes one-time special cash bonus paid to the NEOs
from the break fee received from Guyana Goldfields Inc. (“Guyana Goldfields”) |
| (4) | Consulting
fees are payable to Dr. Rui Feng for his services pursuant to a consulting agreement dated
October 1, 2017. The Board reviews and adjusts such fees annually. No compensation was paid
to Dr. Rui Feng for his services as a director of the Company. |
| (5) | On
February 23, 2023, April 26, 2022, April 5, 2021, May 26, 2020 and November 11, 2020, the
Company awarded RSUs that vest over a three-year period at a value of CAD$4.08, CAD$3.93,
CAD$6.40, CAD$5.46 and CAD$9.45 per unit, respectively. |
| (6) | The
Company has adopted IFRS 2 – Share-based Payment to account for the issuance
of Options to employees and non-employees. The fair value of Options is estimated at the
grant date using the Black-Scholes Option Pricing Model which requires the input of a number
of assumptions. Although the assumptions used reflect Management’s best estimates,
they involve inherent uncertainties based on market conditions generally outside the control
of the Company. The following summarizes the key assumptions used to calculate the fair value
of each set of Options granted in each fiscal year ended March 31: |
| (7) | Mr.
Peng, Lichang was promoted to be the General Manager of China Operations, and Mr. Hong, Song
was promoted to be the Deputy General Manager of China Operation in September 2022. |
|
Name |
Fiscal
Year
of Options
Granted |
Grant
Date |
Options
Granted(1) |
Exercise
price
(CAD$) |
Expired
Date |
Weighted
average
expected
life (years) |
Weighted
average
risk free
rates |
Weighted
average
volatilities |
Weighted
average
fair value
per option
(CAD$) |
Dr.
Rui Feng, Chairman, CEO and Director |
2023 |
23-Feb-2023 |
50,000 |
4.08 |
23-Feb-2028 |
2.75 |
3.95% |
57.31% |
1.55 |
| 2023 |
26-Apr-2022 |
100,000 |
3.93 |
26-Apr-2027 |
2.75 |
2.49% |
62.53% |
1.56 |
| 2022 |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
| 2021 |
11-Nov-2020 |
30,000 |
9.45 |
11-Nov-2025 |
2.75 |
0.31% |
67.49% |
3.87 |
| 2021 |
26-May-2020 |
30,000 |
5.46 |
26-May-2025 |
2.75 |
0.31% |
65.80% |
2.16 |
Derek
Liu,
Chief Financial Officer |
2023 |
26-Apr-2022 |
50,000 |
3.93 |
26-Apr-2027 |
2.75 |
2.49% |
62.53% |
1.56 |
| 2022 |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
| 2021 |
11-Nov-2020 |
30,000 |
9.45 |
11-Nov-2025 |
2.75 |
0.31% |
67.49% |
3.87 |
| 2021 |
26-May-2020 |
30,000 |
5.46 |
26-May-2025 |
2.75 |
0.31% |
65.80% |
2.16 |
Lon
Shaver, Vice President |
2023 |
26-Apr-2022 |
30,000 |
3.93 |
26-Apr-2027 |
2.75 |
2.49% |
62.53% |
1.56 |
| 2022 |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
| 2021 |
11-Nov-2020 |
20,000 |
9.45 |
11-Nov-2025 |
2.75 |
0.31% |
67.49% |
3.87 |
| 2021 |
26-May-2020 |
20,000 |
5.46 |
26-May-2025 |
2.75 |
0.31% |
65.80% |
2.16 |
Lichang
Peng, General Manager of China Operations |
2023 |
26-Apr-2022 |
20,000 |
3.93 |
26-Apr-2027 |
2.75 |
2.49% |
62.53% |
1.56 |
| 2022 |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
| 2021 |
11-Nov-2020 |
20,000 |
9.45 |
11-Nov-2025 |
2.75 |
0.31% |
67.49% |
3.87 |
| 2021 |
26-May-2020 |
20,000 |
5.46 |
26-May-2025 |
2.75 |
0.31% |
65.80% |
2.16 |
Song
Hong, Manager of China Operations |
2023 |
26-Apr-2022 |
20,000 |
3.93 |
26-Apr-2027 |
2.75 |
2.49% |
62.53% |
1.56 |
| 2022 |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
| 2021 |
11-Nov-2020 |
20,000 |
9.45 |
11-Nov-2025 |
2.75 |
0.31% |
67.49% |
3.87 |
| 2021 |
26-May-2020 |
20,000 |
5.46 |
26-May-2025 |
2.75 |
0.31% |
65.80% |
2.16 |
Outstanding
Share-Based Awards and Option-Based Awards
The
following table summarizes awards outstanding at fiscal year ended March 31, 2023, for each NEO:
| |
Option-Based
Awards |
Share-based
Awards |
| Name |
Number
of Securities Underlying Unexercised Options |
Option
Exercise Price (CAD$) |
Option
Expiration Date |
Value
of Unexercised In-The-Money Options (1) (CAD$) |
Number
of Shares or Units of Shares that have not Vested |
Market
or Payout Value of Share-Based Awards that have not Vested
(CAD$) |
Market
or Payout Value of Vested Shares or Units of Shares that not Paid Out or Distributed
(CAD$) |
| Dr.
Rui Feng, Chairman, CEO and Director |
50,000 |
4.08 |
23-Feb-2028 |
53,000 |
|
|
|
| 100,000 |
3.93 |
26-Apr-2027 |
121,000 |
|
|
|
| 110,000 |
9.45 |
11-Nov-2025 |
Nil |
|
|
|
| 110,000 |
5.46 |
26-May-2025 |
Nil |
|
|
|
| |
|
|
|
620,333 |
3,188,511 |
|
| |
|
|
|
|
|
2,892,108 |
Derek Liu,
CFO |
50,000 |
3.93 |
26-Apr-2027 |
60,500 |
|
|
|
| 30,000 |
9.45 |
11-Nov-2025 |
Nil |
|
|
|
| 30,000 |
5.46 |
26-May-2025 |
Nil |
|
|
|
| |
|
|
|
109,999 |
565,395 |
Nil |
Lon
Shaver,
Vice President |
30,000 |
3.93 |
26-Apr-2027 |
36,300 |
|
|
|
| 20,000 |
9.45 |
11-Nov-2025 |
Nil |
|
|
|
| 20,000 |
5.46 |
26-May-2025 |
Nil |
|
|
|
| |
|
|
|
77,917 |
400,493 |
Nil |
| Lichang
Peng, General Manager of China Operations |
30,000 |
3.93 |
26-Apr-2027 |
36,300 |
|
|
|
| 15,000 |
9.45 |
11-Nov-2025 |
Nil |
|
|
|
| 15,000 |
5.46 |
26-May-2025 |
Nil |
|
|
|
| |
|
|
|
43,333 |
222,731 |
Nil |
Song
Hong,
Manager of China Operations |
30,000 |
3.93 |
26-Apr-2027 |
36,300 |
|
|
|
| 20,000 |
9.45 |
11-Nov-2025 |
Nil |
|
|
|
| 20,000 |
5.46 |
26-May-2025 |
Nil |
|
|
|
| |
|
|
|
47,334 |
243,297 |
Nil |
Notes:
| (1) | The
closing price of the Common Shares on the Toronto Stock Exchange (“TSX”) on March
31, 2023, was CAD$5.14. |
Incentive
Plan Awards – Value Vested or Earned during the Year
Name |
Option-Based
Awards
– Value vested during
the year
($) |
Share-Based
Awards –
Value vested during
the year
($) |
Non-Equity
Incentive Plan
Compensation – Value earned
during the year
($) |
Dr.
Rui Feng,
Chairman,
CEO and Director |
- |
- |
1,091,000 |
Derek
Liu,
CFO |
- |
168,659 |
139,834 |
Lon
Shaver,
Vice
President |
- |
126,937 |
75,586 |
Lichang
Peng,
General
Manager of China Operations |
- |
63,785 |
75,586 |
Song
Hong,
Deputy
General Manager of China Operations |
- |
73,053 |
75,586 |
Option
Repricing
There
are no Options held by the NEOs that have been repriced.
Pension
Plan Benefits
The
Company does not provide any pension plan benefits.
Employment
Agreements
As
at the date of this Information Circular, the Company does not have any employment contracts with the NEOs other than as disclosed below.
Dr.
Rui Feng, CEO, Chairman and Director
Dr.
Rui Feng entered into an agreement for a three-year term on October 1, 2020, to provide senior executive services to the Company, at
the annual salary or consulting fee as set out in the summary compensation above. Under the agreement, either party may terminate the
agreement for any reason upon thirty (30) days written notice. In the event that the Company provides notice to terminate this agreement,
it shall pay Dr. Rui Feng a termination fee equal to the full amount of the annual consulting fee, plus an additional 1/6th of the annual
consulting fee for each year of service provided which commenced in September 2003.
Derek
Liu, CFO
On
June 26, 2019, the Company entered into an agreement to engage Derek Liu to provide services as Chief Financial Officer of the Company
at the annual salary as set out in the summary compensation table above. Derek Liu agreed to a “Non-Competition Period” of
twelve months after the termination of his employment agreement.
Lon
Shaver, Vice President
On
July 16, 2018, the Company entered into an employment agreement to engage Lon Shaver as Vice President of the Company, at a base salary
as set out in the summary compensation table above, in which he is entitled to share-based compensation and annual performance bonuses.
Lon Shaver agreed to a “Non-Competition Period” of twelve months after the termination of his employment agreement.
Lichang
Peng, General Manager of China Operations
In
February 2005, the Company entered into an employment agreement with Lichang Peng. Since then, Lichang Peng has been assuming various
positions at the subsidiaries of the Company, including the General Manager of Henan Found
Mining
Co. Limited and the General Manager of Guangdong Found Mining Co. Limited. In September 2022, Lichang Peng was promoted to be the General
Manager of China Operations. His compensation including a base salary, share-based compensation and annual performance bonuses as set
out in the summary compensation table above.
Song
Hong, Manager of China Operations
On
March 7, 2011, the Company entered into an employment agreement with Song Hong. In September 2022, Song Hong was promoted to be the Deputy
General Manager of China Operations of the Company, at a base salary as set out in the summary compensation table above, in which he
is entitled to share-based compensation and annual performance bonuses.
Change
of Control Agreements
The
Company has in effect change of control agreements with each of Dr. Rui Feng and Derek Liu. The terms of the change of control agreements
provide that if an executive officer’s employment agreement or consulting agreement, as applicable, is terminated, other than for
cause, within 18 months after a “Change of Control” (as defined below), the executive officer shall be entitled to: (i) a
lump sum payment equal to 18 months base compensation plus any other amounts owed for compensation in arrears, (ii) bonus, if awarded,
(iii) continuation of benefits for 18 months, (iv) immediate vesting of all outstanding Options, registered share units and other rights
and entitlements, (v) payment of recruitment services to assist in securing alternative employment. The Company is responsible for the
payment of the Change of Control payments and there are no requirements to receiving a Change of Control payment (such as execution of
a non-competition agreement, non-solicitation agreement or confidentiality agreement).
The
change of control agreements deem a “Change of Control” to occur if: (i) a merger, amalgamation, arrangement, consolidation,
reorganization or transfer takes place in which equity securities of the Company possessing more than 50% of the total combined voting
power of the Company’s outstanding equity securities are acquired by a person or persons different from the persons holding those
equity securities immediately prior to such transaction, and the composition of the Board following such transaction is such that the
directors of the Company prior to the transaction constitute less than 50% of the Board membership following the transaction, except
that no Change of Control will be deemed to occur if such merger, amalgamation, arrangement, consolidation, reorganization or transfer
is with any subsidiary or subsidiaries of the Company; (ii) any person, or any combination of persons acting jointly or in concert by
virtue of an agreement, arrangement, commitment or understanding shall acquire or hold, directly or indirectly, 25% or more of the voting
rights attached to all outstanding equity securities; (iii) any person, or any combination of persons acting jointly or in concert by
virtue of an agreement, arrangement, commitment or understanding shall acquire or hold, directly or indirectly, the right to appoint
a majority of the directors of the Company; or (iv) the Company sells, transfers or otherwise disposes of all or substantially all of
its assets, except that no Change of Control will be deemed to occur if such sale or disposition is made to a subsidiary or subsidiaries
of the Company.
Quantified
Impact of Termination and Change of Control Provisions
If
a Change of Control of the Company had occurred on March 31, 2023, the total estimated cash cost to the Company of related payments to
the below NEOs (which includes the accelerated option-based award value and share-based award value) is estimated at $1,676,490. The
following table shows estimated incremental payments triggered pursuant to termination of employment of an NEO in accordance with the
termination provisions described above:
| Name |
Termination
Without Cause Under
Agreement
Provision Value (1)(2)(3) |
Change
of Control Provision Value
(1)(2)(3)(4) |
| Dr.
Rui Feng |
3,838,767 |
1,373,928 |
| Derek
Liu |
- |
302,562 |
Notes:
| (1) | The
termination values assume that the triggering event took place on the last business day of
the Company’s financial year-end (March 31, 2023). |
| (2) | The
accelerated option-based award value on the last business day of the Company’s year-end
(March 31, 2023) was calculated based on the difference between the value of the Options
that would have vested and the closing price of the Common Shares on the TSX on March 31,
2023, of CAD$5.14. |
| (3) | Value
of earned/unused vacation and amounts owing for expense reimbursement are not included as
they are not considered “incremental” payments made in connection with termination
of employment. |
| (4) | If
Dr. Feng is terminated by virtue of a Change of Control, he will receive the greater of the
value under the change of control agreement or under his consulting agreement. |
No
new actions, decisions, or policies were made after the end of the last financial year to affect a reader’s understanding of an
NEO’s compensation for the year ended March 31, 2023.
Compensation
Discussion and Analysis
In
Fiscal 2023, total compensation paid to the Named Executive Officers was $5,379,672, effectively the same compared to $5,375,321 in Fiscal
2022 (Fiscal 2021 - $5,621,452). In Fiscal 2023, total compensation paid to the Named Executive Officers changed primarily as a result
of: i) an increase of $95,525 in payment of annual base fee totalling $1,576,238 compared to $1,480,983 in Fiscal 2022 and $1,336,332
in Fiscal 2021; ii) an increase in payment of annual bonuses totalling $1,457,592 compared to $1405,149 in Fiscal 2022 and $1,358,775
in Fiscal 2021; and iii) grant of restricted share units in the value of $2,007,019 compared to $2,473,516 in Fiscal 2022 and $1,694,510
in Fiscal 2021; and iv) grant of stock options totalling $338,824 compared to $nil in Fiscal 2022, and $912,652 in Fiscal 2021; and v)
no all other compensation paid in Fiscal 2023, compared to $15,673 in Fiscal 2022 and $319,183 in Fiscal 2021.
The
Company’s executive compensation program is overseen by the Compensation Committee of the Board. See “Compensation Committee”
above for a description of the composition of the Compensation Committee. The Compensation Committee has the overall responsibility for
recommending levels of executive compensation that are competitive and motiving, it is responsible for making recommendations to the
Board with respect to the compensation of executive officers of the Company and the Company’s Omnibus Plan. The Compensation Committee
also assumes responsibility for reviewing and monitoring the long-range compensation strategy for the senior management of the Company.
In
carrying out this mandate, the Compensation Committee assesses on an annual basis the performance of the CEO, relative to both industry
performance, and overall Company performance, and compares total compensation to compensation paid by comparable companies. Comparable
silver mining companies continue to be comprised of publicly traded mining companies of similar size in North America, as determined
by market capitalization, revenue, cash flows from operations, net income attributable to equity shareholders of the Company, and complexity
relative to the Company. Comparable companies referenced by the Compensation Committee include the Company’s peer group, as listed
below.
The
objectives of the Company’s compensation program are to attract, retain and inspire performance by members of senior management
in a manner that will enhance the sustainable profitability and growth of the Company. The Company has employed a combination of base
compensation and equity participation through its Omnibus Plan. In addition, the Company annually awards some of the executive officers,
or companies controlled by executive officers, performance bonuses for the year. The Company does not offer securities purchase programs,
Common Shares or units that are subject to restrictions on resale or other incentive plans. The Company, with the exception of Option
grants, focuses on annual rather than long-term compensation.
The
Compensation Committee attempts to ensure that the compensation packages for executive officers and the overall equity participation
plan are in line with publicly listed mining companies of a comparable size and with production, exploration and operations at a similar,
or a more advanced stage. The Compensation Committee does not rely on any formula, or objective criteria and analysis to determine an
exact amount of total compensation. Compensation decisions are made through discussion by the Compensation Committee, with input from
the Chairman and CEO, with the final recommendations of the Compensation Committee being submitted to the Board of Directors for further
discussion and final approval.
The
target is for the total compensation package granted to the CEO to be approximately in the middle range of other comparably sized mining
companies. However, there is no fixed formula, or pre-determined set of peer companies that is used for this determination, rather the
Compensation Committee focuses on the executive compensation of a limited number of silver mining producers with market capitalizations
and production profiles most similar to the Company. For the current year, this peer group consisted of Endeavour Silver Corp., First
Majestic Silver Corp., Fortuna Silver Corp.,
Coeur
Mining Inc., Hecla Mining Company, Pan American Silver Corp., and SSR Mining Inc. (formerly, Silver Standard Resources Inc.). The Compensation
Committee also places a particular emphasis on relative profitability and cash flow from operating activities.
The
Compensation Committee reviews compensation mix on an annual basis with the goal of having a target performance-based compensation for
the Chairman and CEO to be in excess of 50% of his total base compensation. In Fiscal 2023, of total compensation paid to Rui Feng, Chairman
and CEO, 76% came from performance-based compensation compared to 75% in Fiscal 2022. Of the total compensation, 30% came from short
term performance compensation (bonus) and 46% came from long term performance compensation (share-based awards) compared to 31% and 44%,
respectively, in Fiscal 2022.
The
Compensation Committee considered the implications of the risks associated with the Company’s compensation policies and practices
and concluded that, given the nature of the Company’s business and the role of the Compensation Committee in overseeing the Company’s
executive compensation practices, and no risks were identified arising from the Company’s compensation policies and practices that
are reasonably likely to have a material adverse effect on the Company.
No
NEOs or directors are permitted to purchase financial instruments including forward contracts, equity swaps, collars, or like instruments,
that are designed to hedge against a decrease in market value of securities of the Company granted to such NEO or director as compensation.
Base
Compensation
In
the Compensation Committee’s view, paying base salaries that are competitive in the markets in which the Company competes for executive
talent is a first step to attracting and retaining talented, qualified and effective executives. The NEOs are paid salaries commensurate
with those offered by other companies in our industry, with consideration also given to internal relativity, individual performance,
and the difficulty in finding a suitable alternative, particularly for a North American public company with mining operations in China.
Short
Term Incentive Plan
The
Company does not maintain any short-term incentive plans for its NEOs but does award annual performance bonuses, as discussed below.
Share-Based
Awards
The
Company believes that encouraging its executive officers and employees to increase the value of their shareholdings is one of the best
ways of aligning their interests with those of its Shareholders. The Compensation Committee oversees the administration of the Omnibus
Plan. The Omnibus Plan is designed to give eligible directors, officers, employees and consultants of the Company or its subsidiaries,
an interest in preserving and maximizing shareholder value in the longer term, to enable the Company to attract and retain individuals
with experience and ability, and to provide a sense of company ownership to the individual. The Compensation Committee considers share-based
awards, including grants of Options and RSUs when reviewing executive officer compensation packages as a whole.
The
distribution of share-based awards, including Options and RSUs, is recommended by the Chairman and CEO to the members of the Compensation
Committee who decide whether they agree with the recommendations and who, once satisfied, provide their recommendation to the Board.
The number of Options and RSUs recommended for each individual is based upon seniority, responsibilities of the job position, and the
performance of the Company. The Compensation Committee’s recommendation to the Board includes the number of Options and RSUs to
be granted to the independent directors.
The
NEOs are granted Options and/or RSUs commensurate with those offered by other companies in our industry, with consideration also given
to internal relativity and individual performance. Options and/or RSUs are granted to executive officers taking into account a number
of factors, including the amount and terms of Options and/or RSUs previously granted, base compensation, performance bonuses, if any,
and competitive factors. All Options and/or RSUs awarded
were
granted at or above market prices, with a term of three to five years, and vesting in equal bi-annual amounts over either a two, three
or four-year vesting period.
Total
share-based awards granted to eligible participants in Fiscal 2023, 2022, and 2021 are summarized as follows:
| Fiscal year |
Options |
RSUs |
Total share-based awards |
Number of
units granted |
Percentage of
outstanding
common shares
at year end |
Number of
units granted |
Percentage
of outstanding
common shares
at year end |
Number of
units granted |
Percentage of
outstanding
common shares
at year end |
| 2023 |
595,000 |
0.3% |
1,095,501 |
0.6% |
1,690,501 |
1.0% |
| 2022 |
Nil |
Nil |
1,000,000 |
0.6% |
1,000,000 |
0.6% |
| 2021 |
1,127,000 |
0.6% |
1,021,500 |
0.6% |
2,148,500 |
1.2% |
Performance
Bonuses
The
NEOs are paid performance bonuses commensurate with those offered by other companies in our industry, with consideration also given to
Company performance, individual performance and internal relativity. Considerations for NEOs performance bonus awards paid out during
the fiscal 2023 year were based primarily on two elements: (1) executive officers’ personal performance; and (2) Company performance.
The
Executive Bonus Plan provides a variable component of total cash compensation that is directly related to the operating and financial
performance of the Company. A total bonus pool is calculated using measurable parameters that align executive team interests with that
of the Shareholders. A bonus pool equal to 2.5% of cash flows from operations (excluding changes in non-cash working capital) may be
available to NEOs, other corporate headquarter employees, and certain high-ranking managers at the mine operations. From this available
pool, a percentage of base salary will be awarded to an employee when the Company performance and personal performance achieve target
performance for the year. The actual bonus percentage will be determined based on a weighting for achieving Company performance, including
metal production, cost, and environmental and safety performance, and personal performance according to the level of position, as shown
in the following table:
| Positions |
Target
Bonus as % of
Base
Salary(1) |
Company
Performance(2) |
Personal
Performance(3) |
| CEO/Executive
Chairman |
100% |
70% |
30% |
| CFO |
50% |
60% |
40% |
| Senior
managers |
30% |
50% |
50% |
| Other
head office employees |
20% |
20% |
80% |
Notes:
| (1) | For
each individual, the bonus payable may be 30% of his/her target bonus to maximum of 200%
of base salary. |
| (2) | The
Company Performance component is based on the achievement of metal production (silver ounce
equivalent), all-in sustaining production costs per tonne, and safety & environment goals.
Achieving metal production targets will account for 45%, all-in sustaining production costs
per tonne targets will account for 40%, and safety & environment targets 15%. If a safety
& environment accident occurs and causes regulatory, legal or social damage to the Company,
the result of safety & environment component will be set as zero. |
| (3) | The
Personal Performance component is based on contribution to the Company’s core business
achievement, satisfaction to the Company’s requirement or core job requirements, personal
skill, self-development and initiatives, attendance, familiarity with business, work planning
and performance, provide leadership and guidance to other employees or follow Company’s
work instructions and leadership, human resource team building, shareholder communications,
and Information Technology building. On an annual basis, employees and their supervisors
set performance expectations and review progress toward the accomplishment of these goals. |
Payment
of any bonus is discretionary, is subject to final Board approval and revision by the Compensation Committee as deemed necessary.
Performance
Graph
The
Common Shares commenced trading on the TSX on October 24, 2005, under the symbol “SVM” and prior to that time traded on the
TSX Venture Exchange. The Common Shares previously traded on the NYSE, also under the symbol “SVM”, but were voluntarily
delisted in September 2015, and traded on the Over-the-Counter Market under the symbol “SVMLF” until May 15, 2017 when the
Common Shares commenced trading on the NYSE American (formerly, NYSE MKT) under the symbol “SVM”. The following chart compares
the total cumulative shareholder return for CAD$100 invested in Common Shares on April 1, 2018, with the cumulative total return of the
S&P/TSX Composite Index and S&P/TSX Global Gold Index for the period from April 1, 2018 to March 31, 2023. The Common Share performance
as set out in the graph does not necessarily indicate future price performance and does not factor in the payment of dividends by Silvercorp
to its Shareholders.
| As at |
31-Mar-18 |
31-Mar-19 |
31-Mar-20 |
31-Mar-21 |
31-Mar-22 |
31-Mar-23 |
| SVM |
100.00 |
98.85 |
132.85 |
178.39 |
131.41 |
147.55 |
| S&P/TSX Composite Index |
100.00 |
104.78 |
87.06 |
121.69 |
142.45 |
130.80 |
| S&P/TSX Global Gold Index |
100.00 |
104.70 |
126.33 |
152.59 |
186.95 |
164.85 |
The
Company takes into account overall share price performance in determining executive compensation amounts; however, share price performance
is one of a number of factors, as discussed above, that the Company takes into consideration. Overall, the trend in total compensation
for the NEOs has followed the trend in the share price, rising following increase in the share price, and declining when the share prices
decline. Total compensation rises and falls in line with share prices in part because of the valuation of option-based awards and annual
incentive plan payments. There is not a close correlation between the Company’s share price performance and the amount of base
salaries, or consulting fees, (collectively “base pay”) paid to Named Executive Officers. While base pay generally
increased during times when share price was increasing, total base pay has remained relatively stationary during the recent periods of
declining share prices. In considering base pay for the CEO, the Compensation Committee gives particular weight to compensation paid
to NEOs at the closest comparable companies, and is particularly cautious in recommending any reductions to base pay, recognizing the
difficulty in finding English speaking senior management with experience in operating mines in China or a CEO willing to spend the majority
of their time in China.
Application
of Executive Bonus Plan
The
Compensation Committee concluded that the CEO’s personal performance and Company performance in fiscal 2023 were deserving of full
marks.
Highlights
of the evaluation included the following:
| ● | Mined
1,068,983 tonnes of ore, milled 1,072,654 tonnes of ore, and produced approximately 6.6 million
ounces of silver, 4,400 ounces of gold, or approximately 7.0 million ounces of silver equivalent1
plus 68.1 million pounds of lead, and 23.5 million pounds of zinc; |
| ● | Sold
approximately 6.6 million ounces of silver, 4,400 ounces of gold, 65.7 million pounds of
lead, and 23.4 million pounds of zinc, for revenue of $208.1 million; |
| ● | Reported
net income attributable to equity shareholders of $20.6 million, or $0.12 per share, compared
to $30.6 million, or $0.17 per share in the prior year; |
| ● | Realized
adjusted earnings attributable to equity shareholders of $37.0 million, or $0.21 per share.
The adjustments were made to remove impacts from non-recurring items, share-based compensation,
foreign exchange gain/loss, impairment adjustments and reversals, gain/loss on equity investments,
dilution gain/loss, and the share of associates’ operating results; |
| ● | Generated
cash flow from operating activities of $85.6 million; |
| ● | Cash
cost per ounce of silver1, net of by-product credits, of negative $0.42; |
| ● | All-in
sustaining cost per ounce of silver1, net of by-product credits, of $9.73; |
| ● | Paid
$4.4 million of dividends to the Company’s shareholders; |
| ● | Spent
$2.1 million to buy back 838,237 common shares of the Company under its Normal Course Issuer
Bid; |
| ● | Spent
and capitalized $8.3 million on exploration drilling, $34.0 million on underground development
and exploration tunneling, and $15.6 million on equipment and facilities, including $4.8
million on construction of the new mill and tailings storage facility; and |
| ● | Strong
balance sheet with $203.3 million in cash and cash equivalents and short-term investments.
The Company holds further equity investment portfolio in associates and other companies with
a total market value of $141.9 million as at March 31, 2023. |
Bonus
Pool Calculation for Fiscal 2023
A
bonus pool equal to 2.5% of operating cash flow before changes in non-cash working capital may be available to NEOs, other corporate
headquarter employees, and certain high-ranking managers at the mine operations. In Fiscal 2023, the available pool for bonus payment
is $2.2 million. In Fiscal 2022, the available pool for bonus payment was $2.5 million and the total bonus payout was $1.8 million, below
the 2.5% limit. In Fiscal 2021, the available pool for bonus payment was $2.1 million, and the total bonus payout was $1.7 million, below
the 2.5% limit.
Bonus
Award in Fiscal 2023
Given
the Company’s operating, financial and share price performance in Fiscal 2023, the Compensation Committee has recommended, and
the Board of Director concluded that the Fiscal 2023 bonus to the CEO is to be kept as the same as his Fiscal 2022 bonus, which was $1,091,000
or 140% of his base salary paid in Fiscal 2022.
The
Fiscal 2023 bonus is to be paid in Fiscal 2024 and will be reported as portion of the CEO’s compensation in Fiscal 2024.
The
Compensation Committee delegated to the CEO authority to establish performance bonuses for the other officers, to be paid out from the
remaining balance in the bonus pool. The Compensation Committee will review and consider the CEO’s recommendation on the bonus
for other officers.
Compensation
of Directors
Independent
members of the Board of Directors are compensated for acting as directors, and may be granted RSU’s pursuant to the policies of
the TSX and the Company’s Omnibus Plan. The independent members of the Board of Directors may also be awarded non-equity incentive.
The Board of Directors as a whole determines the RSUs and non-equity incentive for each director, after considering recommendation by
the Compensation Committee.
The
following table shows a breakdown of the fees payable to independent directors in fiscal 2023.
| Nature
of Board duty |
Amount
(CAD$) |
| Annual
retainer fee for each Independent Member of the Board1 |
$60,000 |
| Additional
annual retainer fee for lead independent director |
$10,000 |
| Additional
annual retainer fee for Chair of the Audit Committee |
$18,000 |
| Additional
annual retainer fee for Chair of the Compensation Committee |
$15,000 |
| Additional
annual retainer fee for Chair of the Corporate Governance and Nominating Committee |
$12,000 |
| Additional
annual retainer fee for Chair of the Sustainability Committee |
$5,000 |
The
table below sets forth the details of compensation provided to the directors, other than the Named Executive Officers (as defined above
in this Information Circular) who are also directors, during the Company’s most recently completed financial year. Other than compensation
paid to the Named Executive Officers (in their roles as such) who are also directors, and except as noted below, no compensation was
paid to directors in their capacity as directors of the Company or its subsidiaries, or of a committee of the Board of Directors, or
of its subsidiaries, or as consultants or experts, during the Company’s most recently completed financial year.
Director
Compensation Table(1)
| Name |
Fees
earned(2)
($) |
Share-
based awards(3)
($) |
Option-
based awards
($) |
Non-equity
incentive plan compensation(2)
($) |
Pension
value |
All
other compensation
($) |
Total
($) |
| S.
Paul Simpson |
73,318 |
96,206 |
23,583 |
52,608 |
Nil |
Nil |
245,715 |
| Yikang
Liu |
58,957 |
96,206 |
23,584 |
30,234 |
Nil |
Nil |
208,981 |
| David
Kong |
49,131 |
96,206 |
23,584 |
41,119 |
Nil |
Nil |
210,040 |
| Marina
Katusa |
45,351 |
96,206 |
23,585 |
30,234 |
Nil |
Nil |
195,376 |
| Ken
Robertson(4) |
22,676 |
59,751 |
15,883 |
- |
Nil |
Nil |
98,310 |
| Total |
249,433 |
444,575 |
110,219 |
154,195 |
Nil |
Nil |
958,422 |
Notes:
| (1) | Disclosure
about compensation paid to Dr. Rui Feng in his capacity as director has already been disclosed
above under the heading “Summary Compensation Table”. |
| (2) | All
director compensation is paid in Canadian dollars, and converted into U.S. dollars for reporting
purposes using the average exchange rate for fiscal 2023 of $1.0 equalling CAD$1.323. |
| (3) | On
April 26, 2022 and February 23, 2023, the Company awarded RSUs that vest over a three-year
period at a value of CAD$3.93 and CAD$4.08 per unit respectively. |
| (4) | Ken
Robertson was elected to be a director of the Company on September 30, 2022. |
The
following summarized the information of options granted to directors in Fiscal 2023 and Fiscal 2021. No options were granted to directors
in Fiscal 2022.
| Name |
Fiscal
year of Options Granted |
Grant
Date |
Options
Granted |
Exercise
price (CAD$) |
Expired
Date |
Weighted
average expected lives (years) |
Weighted
average risk free rates |
Weighted
average volatilities |
Weighted
average fair value per option
(CAD$) |
S.
Paul Simpson |
2023 |
26-Apr-2022 |
20,000.00 |
3.93 |
26-Apr-2027 |
2.75 |
2.49% |
62.53% |
1.56 |
| 2022 |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
| 2021 |
26-May-2020 |
18,000 |
5.46 |
26-May-2025 |
2.75 |
0.31% |
65.80% |
2.16 |
David
Kong |
2023 |
26-Apr-2022 |
20,000.00 |
3.93 |
26-Apr-2027 |
2.75 |
2.49% |
62.53% |
1.56 |
| 2022 |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
| 2021 |
26-May-2020 |
18,000 |
5.46 |
26-May-2025 |
2.75 |
0.31% |
65.80% |
2.16 |
|
Marina
Katusa |
2023 |
26-Apr-2022 |
20,000.00 |
3.93 |
26-Apr-2027 |
2.75 |
2.49% |
62.53% |
1.56 |
| 2022 |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
| 2021 |
26-May-2020 |
18,000 |
5.46 |
26-May-2025 |
2.75 |
0.31% |
65.80% |
2.16 |
Yikang
Liu |
2023 |
26-Apr-2022 |
20,000.00 |
3.93 |
26-Apr-2027 |
2.75 |
2.49% |
62.53% |
1.56 |
| 2022 |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
| 2021 |
26-May-2020 |
18,000 |
5.46 |
26-May-2025 |
2.75 |
0.31% |
65.80% |
2.16 |
Ken
Robertson |
2023 |
23-Feb-2023 |
10,000.00 |
4.08 |
23-Feb-2028 |
2.75 |
3.95% |
57.31% |
1.55 |
| 2022 |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
| 2021 |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
The
Company grants Options and/or RSUs from time to time at the discretion of the Board to its directors, in accordance with the policies
of the TSX, and the Omnibus Plan.
Outstanding
Share-Based Awards and Option-Based Awards in Fiscal 2023
The
following table summarizes awards outstanding at fiscal year ended March 31, 2023, for each non-executive director.
Name |
Option-Based
Awards |
Share-Based
Awards |
Number
of
Securities
Underlying
Unexercised Options |
Option
Exercise
Price
(CAD$) |
Option
Expiration
Date |
Value
of
Unexercised
In-The-
Money
Options (1)
(CAD$) |
Number
of
Shares or
Units of
Shares that
have not Vested (#) |
Market
or Payout Value of
Share-Based
Awards that
have not Vested
(CAD$) |
Market
or
Payout Value of
Vested Share-Based Awards not Paid Out or Distributed
(CAD$) |
| S.
Paul Simpson |
30,000 |
3.93 |
26-Apr-2027 |
36,300 |
|
|
|
| 18,000 |
5.46 |
26-May-2025 |
|
|
|
|
| |
|
|
|
41,000 |
210,740 |
Nil |
| Yikang
Liu |
30,000 |
3.93 |
26-Apr-2027 |
36,300 |
|
|
|
| 18,000 |
5.46 |
26-May-2025 |
Nil |
|
|
|
| |
|
|
|
41,000 |
210,740 |
Nil |
| David
Kong |
30,000 |
3.93 |
26-Apr-2027 |
36,300 |
|
|
|
| 18,000 |
5.46 |
26-May-2025 |
Nil |
|
|
|
| |
|
|
|
41,000 |
210,740 |
Nil |
| Marina
Katusa |
30,000 |
3.93 |
26-Apr-2027 |
36,300 |
|
|
|
| |
18,000 |
5.46 |
26-May-2025 |
Nil |
|
|
|
| |
|
|
Nil |
41,000 |
133,002 |
17,137 |
| Ken
Robertson |
10,000 |
4.08 |
23-Feb-2028 |
10,600 |
|
|
|
| |
|
|
|
15,000 |
77,100 |
Nil |
Note:
| (1) | The
closing price of the Common Shares on the TSX on March 31, 2023 was CAD$5.14. |
Incentive
Plan Awards – Value Vested or Earned during Fiscal 2023
Name |
Option-Based
Awards – Value vested during the year (CAD$) |
Share-Based
Awards – Value vested during the year (CAD$) |
Non-Equity
Incentive Plan Compensation – Value earned during the year (CAD$) |
| Paul
Simpson |
- |
68,189 |
69,600 |
| Yikang
Liu |
- |
68,189 |
40,000 |
| David
Kong |
- |
68,189 |
54,400 |
| Marina
Katusa |
- |
55,586 |
40,000 |
| Ken
Robertson |
- |
- |
- |
EQUITY
COMPENSATION PLANS
The
only equity compensation plan which the Company has in place is the Omnibus Plan which was previously approved by the Shareholders on
September 30, 2022.
Pursuant
to the Omnibus Plan, the Company may issue options (“Options”), Restricted Share Units (“RSUs”)
and Performance Share Units (“PSUs”), collectively, the (“Awards”). As of August 11, 2023, there
were 1,421,668 Options outstanding (representing 0.8% of the Company’s issued and outstanding Shares) and 2,919,800 RSUs outstanding
(representing 1.7% of the Company’s issued and outstanding Shares). On August 11, 2023, a total of 13,340,180 Awards were available
for future issuance under the Omnibus Plan.
The
Omnibus Plan has been established to attract and retain directors, officers, employees and consultants to the Company (each an “Eligible
Person”), and to provide incentives for them to advance the interests of the Company by affording them with the opportunity
to acquire an equity interest in the Company. Each such Eligible Person granted Awards pursuant to the Omnibus Plan, a “Participant”.
The Omnibus Plan is administered by the Board and the Compensation Committee. The following is a description of the key terms of the
Omnibus Plan, which is qualified in its entirety by reference to the full text of the Omnibus Plan.
| ● | Maximum
Number of Shares Issuable – The maximum number of shares (the “Shares”)
issuable under the Omnibus Plan, together with the number of shares issuable under any other
security-based compensation arrangements of the Company, shall not in the aggregate exceed
10% of the issued and outstanding shares of the Company, from time to time (the “Outstanding
Issue”). Any Shares reserved for issuance pursuant to an Award that has lapsed
or terminated will thereupon no longer be in reserve and may once again be subject to an
Award granted under the Omnibus Plan. Additionally, if any Award has been exercised, the
number of Shares into which such Award was exercised will become available to be issued upon
the exercise of Awards subsequently granted under the Omnibus Plan. |
| ● | Plan
Limits – When combined with all of the Company’s other security-based
compensation arrangements, the Omnibus Plan shall not result in: |
| o | the
number of Shares issuable to any one person at any time exceeding 5% of the Outstanding Issue; |
| o | the
number of Shares (i) issued to Insiders (as defined in the Omnibus Plan) within a one-year
period, and (ii) issuable to Insiders at any time, exceeding 10% of the Outstanding Issue; |
| o | the
issuance to any one Insider and such Insider’s associates, within any one year period,
exceeding 5% of the Outstanding Issue; |
| o | the
issuance to consultants of the Company of a number of Shares exceeding 2% of the Outstanding
Issue; or |
| o | a
number of Shares issuable to any one non-executive Directors within a one-year period exceeding
an Award value of $150,000 per such non-executive Director, of which no more than $100,000
may comprise Options based on a generally accepted valuation method acceptable to the Board. |
Options
| ● | Terms
and Exercise Price – The number of Shares subject to each Option grant, the
exercise price, vesting, expiry date and other terms and conditions thereof will be determined
by the Board. The exercise price of each Option shall in no event be lower than the closing
price of the Shares on the Toronto Stock Exchange (the “Market Price”)
on the trading date prior to the grant date. |
| ● | Term
– Unless otherwise specified at the time of grant, Options shall expire 10
years from the date of grant, unless terminated earlier in accordance with the Omnibus Plan. |
| ● | Vesting
Schedule – Unless otherwise specified at the time of grant, Options vest and
become exercisable in 25% increments on each of the 6month, 12month, 18month, and 24month
anniversaries from the grant date. |
| ● | Exercise
of Options – A participant may exercise vested Options by (i) payment of the
exercise price per Share subject to each Option, or (ii) if permitted by the Board, by undertaking
a cashless exercise with the assistance of a broker (which may include authorizing the broker
to sell Shares on the open market by means of a short sale and forward the proceeds of such
short sale to the Company to satisfy the Option Price and any applicable tax withholdings),
or (iii) if permitted by the Board, on a cashless basis by receiving that number of Shares
equal to the current Market Price less the Option Price |
multiplied
by the number of Options exercised as the numerator, divided by the current Market Price, as the denominator.
| ● | Termination
of Employment – If a Participant ceases to be a director, officer, employee
or consultant of the Company for any reason other than death, such director, officer, consultant
or employee of the Company shall have such rights to exercise any vested Options not exercised
prior to such termination within the lesser of a period of 90 calendar days after the date
of termination, or the expiry date of the Option, or such shorter period as may be set out
in the Participant’s Option Award Agreement. |
| ● | Death – If a Participant dies prior to the expiry of his Option, his legal representatives
may, within the lesser of one year from the date of the Participant’s death or the expiry
date of the Option, exercise that portion of all vested Options granted to the director,
officer, employee or consultant of the Company under this Plan which remains outstanding. |
Restricted
Share Units and Performance Share Units
| ● | Terms – RSUs and PSUs are notional securities that entitle the recipient to receive
cash or Shares at the end of a vesting period. The terms applicable to RSUs and PSUs under
the Omnibus Plan (including the vesting schedule, performance cycle, performance criteria
for vesting and whether dividend equivalents will be credited to a participant’s account)
are determined by the Board at the time of the grant. |
| ● | Vesting – Unless otherwise provided, RSUs typically vest on the second anniversary
of the date the RSU was granted and shall be settled in accordance with the settlement provisions
described below. Unless otherwise noted, PSUs shall vest as at the date that is the end of
their specified performance cycle, subject to any performance criteria having been satisfied
and shall be settled in accordance with the settlement provisions described below. Vesting
of PSUs is contingent upon achieving certain performance criteria. |
| ● | Settlement – On settlement, the Company shall, for each vested RSU or PSU being settled,
deliver to a Participant either (a) one Share, (b) a cash payment equal to the Market Price
of one Share as of the vesting date, or (c) any combination of cash and Shares equal to the
Market Price of one Share as of the vesting date, at the discretion of the Board. |
| ● | Dividend
Equivalents – As dividends are declared, additional RSUs and PSUs may be credited
to a Participant in an amount equal to the greatest whole number which may be obtained by
dividing (i) the value of such dividend or distribution on the payment date therefore by
(ii) the Market Price of one Share on such date. |
| ● | Termination
of Employment – If a director, officer, consultant or employee of the Company
ceases to be so engaged by the Company for any reason other than death, all outstanding RSUs
and PSUs that were vested on or before the date of the termination of employment or services
of such Participant shall be settled in accordance with the applicable settlement provisions
of the Omnibus Plan as of the date of termination, after which time the RSUs and PSUs shall
in all respects terminate. |
| ● | Death – If a Participant dies, all outstanding RSUs and PSUs that were vested on
or before the date of the date of death such Participant shall be settled in accordance with
the applicable settlement provisions of the Omnibus Plan as of the date of death. Outstanding
RSUs that were not vested on or before the date of death shall vest and be settled in accordance
applicable settlement provisions of the Omnibus Plan as of the date of death, prorated to
reflect the actual period between the grant date of the RSU and the date of death. Outstanding
PSUs that were not vested on or before the date of death shall vest and be settled in accordance
with the applicable settlement provisions of the Omnibus Plan as of the date of death, prorated
to reflect the actual period between the commencement of the performance cycle and the date
of death, based on the performance criteria for the applicable performance period(s) up to
the date of death. Subject to the foregoing, any remaining RSUs and PSUs shall in all respects
terminate as of the date of death. |
General
| ● | Assignment – Except as may otherwise be specifically determined by the Board with respect
to a particular Award, Awards granted under the Omnibus Plan are non-assignable and non-transferable
other than by will or by the laws of descent and distribution. |
| ● | Change
of Control – In the event of a Change of Control (as defined in the Omnibus
Plan), all unvested Awards then outstanding will, as applicable, be substituted by or replaced
with awards of the surviving corporation (or any affiliate thereof) or the potential successor
(or any affiliate thereto) (the “continuing entity”) on the same terms
and conditions as the original Awards, subject to appropriate adjustments that do not diminish
the value of the original Awards. If, upon a Change of Control, the continuing entity fails
to comply with this requirement, the vesting of all then outstanding Awards (and, if applicable,
the time during which such Awards may be exercised) will be accelerated in full. Additionally,
in the event of a potential Change of Control, the Board will have the power, in its sole
discretion, to modify the terms of the Omnibus Plan and/or the Awards to assist the Participants
in tendering to a take-over bid or other transaction leading to a Change of Control (including
to accelerate the vesting of Awards and to permit Participants to conditionally exercise
their Awards). |
| ● | Amendments
Not Requiring Shareholder Approval – The Board may amend the Omnibus Plan or
Awards at any time, provided, however, that no such amendment may adversely affect any Award
previously granted to a Participant without the consent of the Participant, except to the
extent required by applicable law (including TSX requirements). Any such amendment will be
subject to all necessary regulatory approvals. Without limiting the generality of the foregoing,
the Board may, without prior notice to the shareholders and without further shareholder approval,
at any time and from time to time, amend the Plan or any provisions thereof, or the form
of Award Agreement or instrument to be executed pursuant to the Plan, in such manner as the
Board, in its sole discretion, determines appropriate: |
| o | for
the purposes of making formal minor or technical modifications to any of the provisions of
the Omnibus Plan; |
| o | to
correct any ambiguity, defective provisions, error or omission in the provisions of the Omnibus
Plan; |
| o | to
change any vesting provisions of Awards; |
| o | to
change the termination provisions of the Awards or the Omnibus Plan; |
| o | to
change the persons who qualify as Eligible Persons under the Omnibus Plan; and |
| o | to
add or change provisions relating to any form of financial assistance provided by the Company
to Participants that would facilitate the purchase of securities under the Omnibus Plan. |
| ● | Amendments
Requiring Shareholder Approval – Shareholder approval (or disinterested shareholder
approval, if required by the policies of the TSX) will be required for the following types
of amendments: |
| o | an
increase in the number of Shares issuable under Awards granted pursuant to the Omnibus Plan; |
| o | a
reduction in the Option Price of an Option, or a cancellation and reissuance of an Option; |
| o | an
extension of (i) the term of an Option beyond its original expiry date, or (ii) the date
on which a PSU or RSU will be forfeited or terminated in accordance with its terms, other
than in accordance with the Omnibus Plan; |
| o | a
revision to the assignment provisions to permit Awards granted under the Plan to be transferable
or assignable other than for estate settlement purposes; |
| o | a
revision to the insider participation limits or the non-executive director limits; |
| o | a
revision to the amending provisions; or |
| o | any
amendment required to be approved by shareholders of the Company under applicable law (including
without limitation, pursuant to the policies of the TSX). |
| ● | Black
Out Periods – If the expiry date or vesting date of an Award falls (other than
a PSU or RSU awarded to a Canadian resident) is (i) during a self-imposed blackout period
imposed under any insider trading policy or similar policy of the Company (a “Blackout
Period”), or (ii) within two business days following the end of a Blackout Period,
the expiry date or vesting date, as applicable, will be automatically extended for a period
of ten business day after the earlier of the end of such Blackout Period, or, provided the
Blackout Period has ended, the expiry date or vesting date of such Award. In the case of
a RSU or PSU awarded to a Canadian resident, any settlement that is effected during a Blackout
Period shall be settled in cash, notwithstanding any other provision of the Omnibus Plan. |
The
following table sets out the annual burn rate for the three most recently completed financial years ending March 31, 2023:
| Fiscal Year |
Number of
options granted |
Weighted average
number of
shares outstanding |
% of Outstanding
shares |
Number of Options
exercised |
% of Outstanding
shares |
| 2023 |
595,000 |
176,862,877 |
0.3% |
- |
0.0% |
| 2022 |
Nil |
176,534,501 |
Nil |
797,083 |
0.5% |
| 2021 |
1,112,000 |
174,868,256 |
0.6% |
1,553,338 |
0.9% |
The
following table sets out equity compensation plan information as at the end of the financial year ended March 31, 2023:
| |
(a) |
(b) |
(c) |
| Plan
Category |
Number
of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights |
Weighted-Average
Exercise Price of Outstanding Options, Warrants and Rights
(CAD$) |
Number
of Securities Remaining Available for Future Issuance under Equity Compensation Plans (excluding securities reflected in column (a)) |
| Equity
compensation plans approved by security holders |
Options:
1,431,668 Common Shares
RSUs: 2,126,670 Common Shares |
$6.01
$5.29 |
10,942,321
Common Shares
3,176,468
Common Shares |
| Equity
compensation plans not approved by security holders |
Nil |
Nil |
Nil |
| Total |
3,558,338
Common Shares |
$5.58 |
14,118,789
Common Shares |
NORMAL
COURSE ISSUER BID
In
August 2022, the Board of Directors approved a share repurchase program pursuant to a normal course issuer bid to acquire up to 7,079,407
common shares of the Company, representing approximately 4% of the 176,985,184 common shares issued and outstanding as of August 16,
2022 (the “Share Repurchase Program”). The Company took this action to provide it with enhanced flexibility should
market conditions result in Silvercorp’s shares being undervalued.
The
Share Repurchase Program will run from August 29, 2022 to August 28, 2023. Purchases will be made at prevailing market prices, through
the facilities of the TSX, the NYSE American, and alternative trading platforms in Canada and the United States, in compliance with regulatory
requirements. All shares acquired thereunder were cancelled.
As
of August 11, 2023, the Company has repurchased and cancelled 196,554 shares under the Share Repurchase Program.
Shareholders
may obtain a copy of the Company’s Notice of Intention to Make a Normal Course Issuer Bid filed with the TSX, without charge, by
contacting the Company at Suite 1750, 1066 West Hastings Street, Vancouver, British Columbia, V6E 3X1, Attention: Assistant Corporate
Secretary.
INDEBTEDNESS
OF DIRECTORS, EXECUTIVE OFFICERS, AND SENIOR OFFICERS
No
director or executive officer of the Company, no proposed nominee for election as a director of the Company, and no associate of any
of the foregoing persons is or at any time since the beginning of the Company’s last financial year has been indebted to the Company
or any of its subsidiaries or to any other entity which indebtedness is the subject of a guarantee, support agreement, letter of credit
or other similar arrangement or understanding provided by the Company or any of its subsidiaries. There is no outstanding indebtedness
owed by any current or former executive officers, directors or employees to the Company, or any of its subsidiaries, as at the date of
the Information Circular.
MANAGEMENT
CONTRACTS
There
are no management functions of the Company which are to any substantial degree performed by a person or company other than the directors
or executive officers of the Company (or private companies controlled by them, either directly or indirectly).
INTEREST
OF INFORMED PERSONS IN MATERIAL TRANSACTIONS
No
informed person of the Company, nominee for election as a director or any associate or affiliate of an informed person or nominee, had
any material interest, direct or indirect, in any transaction since the commencement of the Company’s most recently completed financial
year or in any proposed transaction which has materially affected or would materially affect the Company or any of its subsidiaries.
An “informed person” means: (a) a director or executive officer of the Company; (b) a director or executive officer of a
person or company that is itself an informed person or subsidiary of the Company; (c) any person or company who beneficially owns, directly
or indirectly, Common Shares or who exercises control or direction over Common Shares or a combination of both carrying more than 10%
of the voting rights attached to the outstanding Common Shares other than Common Shares held by the person or company as underwriter
in the course of a distribution; and (d) the Company itself if it has purchased, redeemed or otherwise acquired any of its Common Shares,
for so long as, it holds any of its Common Shares.
AUDITOR
Deloitte
LLP, Independent Registered Public Accounting Firm, of Vancouver, British Columbia, is the Company’s auditor. Deloitte LLP was
appointed as auditor of the Company on November 26, 2012.
ADDITIONAL
INFORMATION
Additional
information relating to the Company is available under the Company’s profile under SEDAR+ at www.sedarplus.ca.
Financial
information regarding the Company and its affairs is provided in the Company’s audited annual consolidated financial statements
and management discussion and analysis (“MD&A”) for its financial year ended March 31, 2023. Shareholders may
contact the Company at the address set out on the face page of this Information Circular to request free copies of the Company’s
financial statements and MD&A. Alternatively, they can be found under the Company’s profile on SEDAR+ at www.sedarplus.ca.
and the Company’s website at www.silvercorp.ca.
BOARD
APPROVAL
The
contents of this Information Circular have been approved and its mailing has been authorized by the directors of the Company.
Dated
at Vancouver, British Columbia, this 11th day of August 2023
| |
BY ORDER OF THE BOARD OF DIRECTORS |
| |
|
| |
“Rui Feng” |
| |
|
| |
Dr. Rui Feng |
| |
Chairman, CEO and Director
Silvercorp Metals Inc. |
SCHEDULE
“1”
BOARD
OF DIRECTORS CHARTER
The
Board is responsible for the stewardship of the Company and for the oversight of its management and affairs. Directors shall exercise
their best business judgment in a manner consistent with their fiduciary duties.
Subject
to the rights of the shareholders to elect the members of the Board and applicable law and stock exchange rules, a majority of the members
of the Board should be independent in accordance with National Policy 58-201 – Corporate Governance Guidelines. The Board shall
establish and maintain procedures and policies to ascertain independence and address conflict of interest issues.
Meetings
of the Board will be called, scheduled and held in accordance with the Company’s constating documents and applicable law. All directors
are expected to attend and be prepared to participate, including reviewing all meeting materials before every Board meeting. The independent
directors should hold regularly scheduled meetings without non-independent members and members of management in attendance. The independent
directors may also hold other meetings at such times and with such frequency as the independent directors consider necessary. Where the
Chair of the Board is not independent, an independent director will be appointed as “lead director” and such “lead
director” will chair all meetings of independent directors.
The
Board’s primary responsibilities, which are discharged directly and through delegation to its Committees, include the following:
| ● | The
primary goal of the Board is to act in the best interests of the Company to enhance long-term
shareholder value while considering the interests of the Company’s various stakeholders,
including shareholders, employees, the communities and others. |
| ● | To
act honestly and in good faith with a view to the best interests of the Company. |
| ● | To
exercise due care, diligence and skill that reasonably prudent persons would exercise in
comparable circumstances. |
| ● | Consistent
with its responsibilities to the Company, to further the interests of the shareholders. |
| ● | To
consider business opportunities and risks, and to adopt business strategies and/or strategic
plans. |
| ● | To
evaluate the principal risks of the Company’s business in consultation with management,
and to implement an appropriate system to manage these risks. |
| ● | To
develop and oversee an investor relations and shareholder communications policy (“Corporate
Disclosure Policy”) for the Company. |
| ● | To
develop and oversee a policy (“Whistleblower Policy”) to establish procedures
for the confidential, anonymous submission by employees and consultants and any other person
of concerns regarding the Company and otherwise facilitate measures for receiving feedback
from stakeholders. |
| ● | To
oversee management’s adoption of effective internal control and management information
systems. |
| ● | To
review and approve annual and quarterly financial statements and the publication thereof
by management. |
| ● | To
review and approve operating plans and any capital budget plans. |
| ● | To
oversee succession planning and to select and approve all key executive appointments, and
to monitor executive training and development. |
| ● | To
develop and update, as required, the Company’s approach to corporate governance, including
establishing a set of corporate governance principles and guidelines that are specifically
applicable to the Company. |
| ● | To
adopt a code of conduct to govern employees and management in their activities for and on
behalf of the Company. |
| ● | To
promote diversity throughout the Company, commensurate with the Company’s needs. |
| ● | To
satisfy itself as to the integrity of the management of the Company and ensure that such
officers promote a culture of integrity throughout the Company consistent with the adopted
code of conduct. |
| ● | To
take action on issues that by law or practice require the independent action of a Board or
one of its Committees. |
| ● | To
oversee management in its implementation of effective programs to provide a safe work environment,
to employ sound environmental practices, and to operate in accordance with applicable laws,
regulations and permits. |
| ● | To
oversee management in its implementation of an effective communications policy with regard
to investors, employees, the communities in which it operates and the governments of those
communities. |
Each
new director, on joining the Board, shall be given an outline of the nature of the Company’s business, its corporate strategy,
current issues within the Company, the expectations of the Company concerning input from directors and the general responsibilities of
the Company’s directors. The Company will provide new directors with an orientation program upon joining the Company that includes
copies of relevant financial, technical, geological and other information regarding its properties, as well as meetings with management.
Board members are encouraged to communicate with management and auditors, to keep themselves current with industry trends and developments,
and to attend related industry seminars. The Company may also request that Board members be advised by counsel to the Company of their
legal obligations as directors of the Company.
The
Board shall conduct evaluation of the performance of its duties under this Charter in such manner as it deems appropriate. The Board
will assess any policy, procedure, guideline or standard, including this Charter, created by the Board to manage or fulfill its roles,
duties and responsibilities, to ensure that they remain current and relevant. The Board will ensure that each Committee shall perform
the same assessment in relation to any Committee policy, procedure, guideline or standard.
To
fulfill its roles, duties and responsibilities effectively, the Board may contact and have discussions with the Company’s external
auditors and the Company’s officers and employees and request Company information and documentation from these persons. The Board
may, in its sole discretion, retain and obtain the advice and assistance of independent outside counsel and such other advisors as it
deems necessary to fulfil its duties and responsibilities under this Charter. The Board may set the compensation and oversee the work
of any outside counsel and other advisors to be paid by the Company.
This
charter was reviewed by the Corporate Governance Committee and last approved by the board of directors on August 9, 2023.
SCHEDULE
“2”
CORPORATE
GOVERNANCE AND NOMINATING COMMITTEE CHARTER
The
Company has established a Corporate Governance and Nominating Committee of the Board of Directors which consists of three or more directors,
each of whom shall be independent in accordance with National Policy 58-201 – Corporate Governance Guidelines. The Committee meets
at least annually, or more frequently as required to fulfill its responsibilities. The Committee shall report regularly to the Board
regarding its actions and make recommendations to the Board as appropriate. The Committee is governed by the same rules regarding meetings
(including meetings in person or by telephone or other similar communications equipment), resolutions in writing in lieu of a meeting,
notice, waiver of notice and voting requirements as are applicable to the Board.
The
Committee’s mandate is to assist the Board in establishing and maintaining a sound system of corporate governance through a process
of continuing assessment and enhancement.
The
Board shall appoint members of the Committee. The members of the Committee shall be appointed for one-year terms or such other terms
as the Board may determine and shall serve until a successor is duly appointed by the Board or until the member’s earlier death, resignation,
disqualification or removal. The Board may remove any member from the Committee at any time with or without cause. The Board shall fill
Committee member vacancies by appointing a member from the Board. If a vacancy on the Committee exists, the remaining members shall exercise
all of the Committee’s powers so long as a quorum exists. A quorum for decisions of the Committee shall be a majority of Committee members.
The Board shall appoint a chair of the Committee from the Committee members.
The
Committee shall have the authority to engage and compensate any outside advisor that it determines to be necessary to permit it to carry
out its duties.
The
Committee’s duties and responsibilities are:
| ● | To
advise the Chairman of the Board and the Board on matters of corporate governance, including
adherence to any governance guidelines or rules established by applicable regulatory authorities. |
| ● | To
advise the Board on issues of conflict of interest for individual directors. |
| ● | To
examine the effectiveness of the Company’s corporate governance practices at least
annually and to propose such procedures and policies as the Committee believes are appropriate
to ensure that the Board functions independently of management, management is accountable
to the Board and procedures are in place to monitor the effectiveness of performance of the
Board, committees of the Board and individual directors. |
| ● | To
develop and review, together with the Chairman, CEO and the President of the Board, annual
Board goals or improvement priorities. |
| ● | To
identify and to recommend to the Board suitable candidates for nomination as new directors,
and to review the credentials of directors standing for re-election. In making its recommendations,
the Committee should consider: |
| a) | the
competencies and skills that the Board considers to be necessary for the Board, as a whole, to possess; |
| b) | the
competencies and skills that the Board considers each existing director to possess; and |
| c) | the
competencies and skills each new nominee will bring to the boardroom. |
The
Committee should also consider whether or not each new nominee can devote sufficient time and resources to his or her duties as a Board
member.
| ● | With
assistance of management, to organize and provide an orientation program for new directors
where appropriate. |
| ● | To
periodically review the mandates of the Board and committees of the Board and determine what
additional committees of the Board, if any, are required or appropriate. |
| ● | To
develop such codes of conduct and other policies as are appropriate to deal with the confidentiality
of the Company’s information, insider trading and the Company’s timely disclosure
and other public Company obligations. |
| ● | To
take such other steps as the Committee decides are appropriate, in consultation with the
Board, to ensure that proper corporate governance practices are in place for the Company,
with reference to the Toronto Stock Exchange guidelines or recommendations and other regulatory
requirements on corporate governance. |
| ● | To
review its charter and assess annually the adequacy of this mandate, the effectiveness of
its performance and, when necessary, and to recommend changes to the Board of Directors for
its approval. |
The
Committee shall have the authority to delegate any of its responsibilities, along with the authority to take action in relation to such
responsibilities, to one or more subcommittees as the Committee may deem appropriate in its sole discretion.
The
Committee shall conduct an annual evaluation of the performance of its duties under this Charter and shall present the results of the
evaluation to the Board. The Committee shall conduct this evaluation in such manner as it deems appropriate.
This
charter was reviewed by the Corporate Governance Committee and last approved by the board of directors on August 9, 2023.
SCHEDULE
“3”
COMPENSATION COMMITTEE CHARTER
The
Compensation Committee of the Board of Directors consists of at least three Directors, each of whom shall be independent in accordance
with National Policy 58-201 – Corporate Governance Guidelines. The Committee meets at least annually, or more frequently as required
to fulfill its responsibilities. The Committee shall report regularly to the Board regarding its actions and make recommendations to
the Board as appropriate. The Committee is governed by the same rules regarding meetings (including meetings in person or by telephone
or other similar communications equipment), resolutions in writing in lieu of a meeting, notice, waiver of notice and voting requirements
as are applicable to the Board.
The
purpose of the Compensation Committee is to assist the Board in discharging its duties relating to compensation of the executive officers
of the Company, the goals are to enable the Company to attract, retain and motivate the most qualified talent who will contribute to
the long term success of the Company by aligning compensation with the Company’s business objectives and performance, and aligning
incentives with the interests of shareholders to maximize shareholders’ value.
The
Board shall appoint members of the Compensation Committee. The members of the Compensation Committee shall be appointed for one-year
terms or such other terms as the Board may determine and shall serve until a successor is duly appointed by the Board or until the member’s
earlier death, resignation, disqualification or removal. The Board may remove any member from the Compensation Committee at any time
with or without cause. The Board shall fill Compensation Committee member vacancies by appointing a member from the Board. If a vacancy
on the Compensation Committee exists, the remaining members shall exercise all of the Compensation Committee’s powers so long as a quorum
exists. A quorum for decisions of the Compensation Committee shall be a majority of Compensation Committee members. The Board shall appoint
a chair of the Compensation Committee from the Compensation Committee members.
The
Committee shall have the authority to engage and compensate any outside advisor that it determines to be necessary to permit it to carry
out its duties.
The
Committee’s duties and responsibilities are:
| ● | To
review and approve annually the corporate goals and objectives applicable to the compensation
of the chief executive officer (the “CEO”); evaluate at least annually the CEO’s
performance in light of those goals and objectives; and determine (or make recommendations
to the Board with respect to) the CEO’s compensation level based on this evaluation. |
| ● | To
make recommendations to the Board with respect to the compensation of other senior management
and executive officers of the Company. |
| ● | To
review the compensation and benefits of the directors in their capacity as directors of the
Company to ensure that such compensation reflects the responsibilities and risks involved
in being a director. |
| ● | To
review and make recommendations to the Board as to the general compensation and benefits
policies and practices of the Company, including incentive stock options for all employees,
consultants, directors and officers. |
| ● | To
review the disclosure to be made of director and executive compensation in the Management
Information Circular or otherwise before it is publicly disclosed. |
| ● | To
ensure there are appropriate benefit programs in place for management and staff. |
| ● | To
review and make recommendations to the Board for its approval on any special compensation
and benefit arrangements. |
| ● | To
review its compensation practices by comparing them to surveys of relevant competitors and
to set objective compensation based on this review. |
| ● | To
perform such other functions as the Board may from time to time assign to the Committee. |
| ● | To
review its charter and assess annually the adequacy of this mandate, the effectiveness of
its performance, and to recommend changes to the Board for its approval. |
The
Committee shall have the authority to delegate any of its responsibilities, along with the authority to take action in relation to such
responsibilities, to one or more subcommittees as the Committee may deem appropriate in its sole discretion.
The
Committee shall conduct an annual evaluation of the performance of its duties under this Charter and shall present the results of the
evaluation to the Board. The Committee shall conduct this evaluation in such manner as it deems appropriate.
This
charter was reviewed by the Corporate Governance Committee and last approved by the board of directors on August 9, 2023.
SCHEDULE “4”
AUDIT COMMITTEE CHARTER
The main objective of the Audit
Committee is to act as a liaison between the Board and the Company’s independent auditors (the “Auditors”) and to assist
the Board in fulfilling its oversight responsibilities with respect to (a) the financial statements and other financial information provided
by the Company to its shareholders, the public and others, (b) the Company’s compliance with legal and regulatory requirements,
(c) the qualification, independence and performance of the Auditors and (d) the Company’s risk management and internal financial and accounting
controls, and management information systems.
Although the Committee has the powers
and responsibilities set forth in this Charter, the role of the Committee is oversight. The members of the Committee are not full-time
employees of the Company and may or may not be accountants or auditors by profession or experts in the fields of accounting or auditing
and, in any event, do not serve in such capacity. Consequently, it is not the duty of the Committee to conduct audits or to determine
that the Company’s financial statements and disclosures are complete and accurate and are in accordance with generally accepted
accounting principles and applicable rules and regulations.
The Committee shall consist of
three or more directors and shall satisfy the laws governing the Company and the independence, financial literacy, expertise and experience
requirements under applicable securities law, stock exchange and any other regulatory requirements applicable to the Company.
The members of the Committee and
the Chair of the Committee shall be appointed by the Board. A majority of the members of the Committee shall constitute a quorum. A majority
of the members of the Committee shall be empowered to act on behalf of the Committee. Matters decided by the Committee shall be decided
by majority votes.
Any member of the Committee may be
removed or replaced at any time by the Board and shall cease to be a member of the Committee as soon as such member ceases to be a director.
The Committee may form and delegate authority
to subcommittees when appropriate.
The Committee shall meet as frequently as circumstances
require, but not less frequently than four times per year. The Committee shall meet at least quarterly.
The Committee may invite, from time to time, such persons
as it may see fit to attend its meetings and to take part in discussion and consideration of the affairs of the Committee.
The Company’s accounting and financial officer(s)
and the Auditors shall attend any meeting when requested to do so by the Chair of the Committee.
| (1) | The Committee shall recommend to the Board of directors: |
| (a) | the external auditor to be nominated
for the purpose of preparing or issuing an auditor’s report or performing other audit, review or attest services for the Company; and |
| (b) | the compensation of the external auditor. |
| (2) | The Committee shall be directly responsible for overseeing
the work of the external auditor engaged for the purpose of preparing or issuing an auditor’s report or performing other audit, review
or attest services for the Company, including the resolution of disagreements between management and the external auditor regarding financial
reporting. |
| (3) | The Committee must pre-approve all non-audit services
to be provided to the Company or its subsidiary entities by the Company’s external auditor. |
| (4) | The Committee must review the Company’s financial
statements, MD&A and annual and interim earnings press releases before the Company publicly discloses this information. |
| (5) | The Committee must be satisfied that adequate procedures
are in place for the review of the Company’s public disclosure of financial information extracted or derived from the Company’s financial
statements, other than the public disclosure referred to in subsection (4), and must periodically assess the adequacy of those procedures. |
| (6) | The Committee must establish procedures for: |
| (a) | the receipt, retention and treatment of complaints received by the Company
regarding accounting, internal accounting controls, or auditing matters; and |
| (b) | the confidential, anonymous submission by employees of the Company of
concerns regarding questionable accounting or auditing matters. |
| (7) | An audit committee must review and approve the Company’s
hiring policies regarding partners, employees and former partners and employees of the present and former external auditor of the issuer. |
The Committee shall have the following authority:
| (a) | to engage independent counsel and other advisors as it determines necessary to carry out its duties, |
| (b) | to set and pay the compensation for any advisors employed by the Committee, and |
| (c) | to communicate directly with the internal and external auditors. |
This charter was reviewed by the Corporate Governance
Committee and last approved by the board of directors on August 9, 2023.
SCHEDULE
“5”
SUSTAINABILITY COMMITTEE CHARTER
The Board of Directors (the “Board”)
of Silvercorp Metals Inc. (the “Company”) established a Sustainability Committee (the “Committee”) in furtherance
of its commitments to integrate environmental, social, and governance (“ESG”) factors into its business strategy in promotion
of sustainable and socially responsible resource development.
PURPOSE
The Committee’s primary purpose is to provide advice
and recommendations on: environmental and social/community affairs, sustainable resource development, health and safety issues, human
rights and diversity, and all related policies and initiatives, to the Board in its oversight role.
COMPOSITION & MEETINGS
The Committee shall be composed
of a minimum of three members and at least one member of the Committee shall be independent as determined by the Board in accordance with
the applicable laws. The members of the Committee and the Chair shall be appointed by the Board annually. The composition of the Committee
shall comply with all applicable laws. Each member of the Committee serves at the pleasure of the Board and the Board may fill vacancies
in the Committee by appointment. The Committee will meet at least annually, and more frequently as required or desired.
DUTIES & RESPONSIBILITIES
The Committee’s duties and responsibilities are to:
| 1. | Provide oversight in management’s administration
of policies and procedures with respect to ESG matters having regard to regulatory requirements and the objectives of the Company, as
applicable, and, when appropriate, provide recommendations on how to enhance the policies as regulations and objectives change. |
| 2. | Provide oversight in collection and assessment of lost time data, rehabilitation
status, incident reporting, energy use and intensity, ESG crisis management plan, and other safety indicators across the Company. |
| 3. | Provide oversight over the annual ESG report and review any significant issues that arise from these
audits. |
| 4. | Review and assess management’s performance against ESG objectives
and targets, as may be recommended by the Committee and approved by the Board. |
| 5. | If deemed necessary and appropriate by the Committee, make periodic visits
to the Company’s operations to observe ESG procedures in practice. |
| 6. | Promote commitment to continuous improvement in ESG performance at all levels of the Company. |
| 7. | Oversee and participate of executive management
in the investigation and review of material ESG incidents involving the Company. |
| 8. | Provide oversight over significant ESG incidents,
with access to legal counsel to discuss legal exposures and ramifications associated with each such incident, and to seek legal advice
with regard to the handling of the incident and to prepare for expected litigation, if necessary. |
| 9. | Monitor current, pending or threatened legal action by or against the Company relating to ESG issues. |
| 10. | Provide oversight in management review and identification
of risks related to ESG matters and adoption of programs to reduce risks. |
| 11. | To perform such other functions as the Board may from time to time assign to the Committee. |
AUTHORITY
The Committee shall have access
to all records, facilities, and personnel of the Company necessary to carry out its responsibilities.
At the invitation of the Committee,
one or more officers or employees of the Company or third-party advisors for the Company, may attend meetings of the Committee.
The Company shall provide for appropriate
funding, as determined by the Committee, for payment of reasonable compensation of compensation consultants, independent legal counsel
or any other advisor retained by the Committee.
The Committee, upon approval by
a majority of the members of the Committee, may delegate certain aspects of its duties and responsibilities to officers, and/or employees
of the Company, all of whom must report back to the full Committee, to assist the Committee in fulfilling its responsibilities.
This Policy was reviewed by the
Corporate Governance Committee and last approved by the board of directors on August 9, 2023.
EXHIBIT “A”
CORPORATE GOVERNANCE
DISCLOSURE OF
SILVERCORP METALS INC. (the “Company”)
| |
Governance Disclosure Guidelines under
National Instrument 58-101 Disclosure of Corporate
Governance Practices (“NI 58-101”) |
Corporate Governance Practices of the Company |
| 1. |
Board of Directors |
| (a) |
Disclose the identity of directors who are independent. |
The following members of the board of directors of the Company (the “Board”) are considered to be “independent” within the meaning of NI 58-101: S. Paul Simpson, Marina Katusa, David Kong, Yikang Liu and Ken Robertson. |
| (b) |
Disclose the identity of directors who are not independent, and describe the basis for that determination. |
The following director is not independent for the reasons stated: Dr. Rui Feng is currently the CEO and Chairman of the Company. |
| (c) |
Disclose whether or not a majority of directors are independent. If a majority of directors are not independent, describe what the Board does to facilitate its exercise of independent judgment in carrying out its responsibilities. |
A majority of the Company’s current directors are independent. Five of the six persons nominated for election as directors at the annual general meeting qualify as independent directors for the purposes of NI 58-101. |
| (d) |
If a director is presently a director of any other issuer that is a reporting issuer (or the equivalent) in the same jurisdiction or a foreign jurisdiction, identify both the director and the other issuer. |
Dr. Rui Feng is a director of New Pacific Metals Corp. and
Tincorp Metals Inc.;
Mr. Kong is a director of Uranium Energy Corp. and Gold
Mining Inc.
Marina Katusa is a director of Osisko Development Corp.
Ken Robertson is a director of Mountain Province Diamonds
Inc. and Gold Royalty Corporation |
| (e) |
Disclose whether or not the independent directors hold regularly scheduled meetings at which non-independent directors and members of management are not in attendance. If the independent directors hold such meetings, disclose the number of meetings held since the beginning of the issuer’s most recently completed financial year. If the independent directors do not hold such meetings, describe what the Board does to facilitate open and candid discussion among its independent directors. |
The independent directors hold meetings at which non-independent directors and members of management are not in attendance at the end of every regularly scheduled Board meeting. Five such meetings have been held since April 1, 2022. |
| (f) |
Disclose whether or not the chair of the Board is an independent director. If the Board has a chair or lead director who is an independent director, disclose the identity of the independent chair or lead director, and describe his or her role and responsibilities. If the Board has neither a chair that is independent nor a lead director that is independent, describe what the Board does to provide leadership for its independent directors. |
Dr. Rui Feng, Chair of the Board, is not an independent
director.
Mr. Paul Simpson is the independent lead director of
the Board. The role of the independent lead director is to act as the Chair for all meetings referred to in section 1(e) above.
The Board adopted a formal written mandate which defines
its stewardship responsibilities to which all Board members strictly adhere. This mandate is attached to this Information Circular as
Schedule “1”. The Board also adopted position descriptions for the CEO, the Chair of each Board Committee and the Directors
which are posted on the Company’s website at www.silvercorpmetals.com/company/corporate_governance. |
| (g) |
Disclose the attendance record of each director for all Board meetings held since the beginning of the issuer’s most recently completed financial year. |
The attendance record of each of the directors is disclosed in the Information Circular under the heading “Nominees For Election as Directors – Board and Committee Membership and Attendance in Fiscal 2023”. |
| 2. |
Board Mandate |
| |
Disclose the text of the Board’s written mandate.
If the Board
does not have a written mandate, describe how the Board
delineates its role and responsibilities. |
The Board has adopted a formal written mandate which defines
its
stewardship responsibilities, which is attached to
the Information Circular as Schedule “1”.
|
| |
Governance Disclosure Guidelines under
National Instrument 58-101 Disclosure of Corporate
Governance Practices (“NI 58-101”) |
Corporate Governance Practices of the Company |
| |
|
In addition, the committees of the Board have adopted formal written
mandates that define their roles and responsibilities. The mandates are attached to the Information Circular as: Schedule “2”
Corporate Governance Committee Charter; Schedule “3” Compensation Committee Charter; Schedule “4”
Audit Committee Charter; and Schedule “5” Sustainability Committee Charter. |
| 3. |
Position Descriptions |
| (a) |
Disclose whether or not the Board has developed written position descriptions for the Chair and the Chair of each Board committee. If the Board has not developed written position descriptions for the Chair and/or the Chair of each Board committee, briefly describe how the Board delineates the role and responsibilities of each such position. |
The Board has developed written position descriptions for the CEO, the Chair of each Board Committee and the Directors which are posted on the Company’s website at www.silvercorpmetals.com/company/corporate_governance. |
| (b) |
Disclose whether or not the Board and CEO have developed a written position description for the CEO. If the Board and CEO have not developed such a position description, briefly describe how the Board delineates the role and responsibilities of the CEO. |
The Board and CEO have adopted a written position description for the CEO. |
| 4. |
Orientation and Continuing Education |
| (a) |
Briefly describe what measures the Board takes to orient new directors regarding (i) the role of the Board, its committees and its directors, and (ii) the nature and operation of the issuer’s business. |
Each new director, on joining the Board, is given an
outline of the nature of the Company’s business, its corporate strategy, current issues within the Company, the expectations of
the Company concerning input from directors and the general responsibilities of the Company’s directors.
The Company provides new directors with an orientation
program upon joining the Company that includes copies of relevant financial, technical, geological and other information regarding its
properties, as well as meetings with management.
Board members are encouraged to communicate with management
and auditors, to keep themselves current with industry trends and developments, and to attend related industry seminars. The Company may
also request that Board members be advised by counsel of the Company regarding their legal obligations as directors of the Company. Directors
have been and will continue to be given tours of the Company’s mines and development sites to give such directors additional insight
into the Company’s business. |
| (b) |
Briefly describe what measures, if any, the Board takes to provide continuing education for its directors. If the Board does not provide continuing education, describe how the Board ensures that its directors maintain the skill and knowledge necessary to meet their obligations as directors. |
Directors have been and will continue to inspect the
Company’s sites of mining operations, mine development, and exploration sites to give the directors an updated view of the Company’s
business.
In addition, from time to time, the Company instructs
its General Counsel and Corporate Secretary to circulate to the Board members a memorandum summarizing new and evolving precedents applicable
to directors of public companies with respect to their conduct, duties and responsibilities. Individual board members, and the General
Counsel and Corporate Secretary, from time to time, attend continuing education courses to stay abreast of latest developments in corporate
governance and regulatory compliance issues. The Company also circulates feedback and commentary when received from proxy advisory firms
to the directors. |
| 5. |
Ethical Business Conduct |
| (a) |
Disclose whether or not the Board has adopted a written code for the directors, officers and employees. If the Board has adopted a written code: (i) disclose how a person or company may obtain a copy of the code; (ii) describe how the Board monitors compliance with its code, or if the Board does not monitor compliance, explain whether and how the Board satisfies itself regarding compliance with its code; and (iii) provide a cross-reference to any material change report filed since the beginning of the issuer’s most recently completed financial year that pertains to any conduct of a director or executive officer that constitutes a departure from the code. |
As part of its stewardship responsibilities, the Board
approved a formal “Code of Business Conduct and Ethics” (the “Code”) that is designed to deter wrong-doing
and to promote honest and ethical conduct and full, accurate and timely disclosure. A copy of the Code is available on the Company’s
website, www.silvercorp.ca, and may be obtained by contacting the Company at the address on the cover of this Information Circular or
at www.sedarplus.ca.
The Company’s Corporate Governance Committee is responsible
for setting the standards of business conduct contained in the Code and overseeing and monitoring compliance with the Code. The Code also
sets out mechanisms for the reporting of unethical conduct.
The Code is applicable to all employees, consultants,
officers and directors, regardless of their position with the Company, at all times and everywhere the Company does business. The Code
provides that the Company’s employees, consultants, officers and directors will uphold its commitment to a culture of honesty, integrity
and accountability.
The Board has not granted any waiver of the Code in
favour of a director or executive officer, and no material change report has been required or filed in connection with the Code.
When proposed transactions or agreements in which directors
or officers may have an interest, material or not, are presented to the Board, the directors are required to disclose any such interest
and the persons who have such an interest are excluded from all discussion on the matter and are not permitted to vote on the proposal.
All such interests in transactions or agreements involving senior management are dealt with by the Board, regardless of apparent immateriality.
The Board also adopted a formal “Code of Ethical
Conduct for Financial Managers” that is applicable to all Financial Managers of the Company, being the Company’s CEO, CFO,
principal accounting officer, controller and persons performing similar functions.
Further, the Board approved and implemented a “Whistle
Blower” process available to all directors, officers, employees, and any other party. The Chair of the Audit Committee monitors
and reports any alleged wrongdoing to the Audit Committee.
The Board approved and implemented a Corporate Disclosure
Policy to ensure that communications to the investing public about the Company and its subsidiaries are timely, factual and accurate;
and broadly disseminated in accordance with all applicable legal and regulatory requirements.
Further, the Company has adopted a Human Rights Statement
which is stated below and included on the Company’s website:
Silvercorp is committed to supporting the human
rights of our employees, local community members and all other stakeholders affected by our operations. We do not tolerate human rights
abuses throughout any of our business activities, including child labour or forced labour of any kind. We strive to comply with all applicable
regulations and laws and endeavour to act in accordance with the International Bill of Human Rights, the Universal Declaration on Human
Rights, and the UN Voluntary Principles on Security and Human Rights. All Silvercorp employees are expected to uphold and respect the
human rights of others, including but not limited to complying with the Company’s Code of Business Conduct & Ethics, Anti-Corruption
Policy and other Company policies and procedures. |
| (b) |
Describe any steps the Board takes to ensure directors exercise independent judgment in considering transactions and agreements in respect of which a director or executive officer has a material interest. |
Directors must disclose to the Company’s General
Counsel any instances in which they perceive they have a material interest in any matter being considered by the Board. If it is determined
there is a conflict of interest, or that a material interest is held, the conflict must be disclosed to the Board. In addition, the interested
Board member must refrain from voting and exit the meeting while the transaction at issue is being considered by the Board.
The Company has also adopted a Diversity and Inclusion Statement,
which is set out in 11. below. |
| (c) |
Describe any other steps the Board takes to encourage and promote a culture of ethical business conduct. |
The Corporate Governance Committee is responsible for
setting the standards of business conduct contained in the Code and for overseeing and monitoring compliance with the Code.
The Board sets the tone for ethical
conduct throughout the Company by considering and discussing ethical considerations when reviewing the corporate transactions of the Company. |
| 6. |
Nomination of Directors |
| (a) |
Describe the process by which the Board identifies new candidates for Board nomination. |
The Board is responsible for recommending candidates
for nomination to the Board and its committees. The Corporate Governance Committee, which is composed entirely of independent directors,
assists the Board by identifying and recommending to the Board suitable candidates for nomination as new directors.
The Board has adopted a majority voting policy as advocated
by the Canadian Coalition for Good Governance. Each director nominee has agreed to tender their resignation from the board if they obtain
less than a majority of votes in favour of their election in uncontested elections. |
| (b) |
Disclose whether or not the Board has a nominating committee composed entirely of independent directors. If the Board does not have a nominating committee composed entirely of independent directors, describe what steps the Board takes to encourage an objective nomination process. |
The Corporate Governance Committee is composed entirely of independent directors. Generally, new nominees must have one or more of the following attributes: a track record in general business management, particularly with public companies; special expertise in an area of strategic interest to the Company; and financial literacy. Nominees must also have the ability to devote the required time to the Company, show support for the Company’s mission and objectives, and have a willingness to serve the Company and its Shareholders. |
| (c) |
If the Board has a nominating committee, describe the responsibilities, powers and operation of the nominating committee. |
The Board is composed of individuals who will best serve the interest of the Company and assist management in achieving the Company’s goals. Members of the Board and representatives of the mining industry are often consulted for potential candidates. |
| 7. |
Compensation |
| (a) |
Describe the process by which the Board determines the compensation for the issuer’s directors and officers. |
The Company’s Chairman and Compensation Committee review overall compensation policies and make recommendations to the Board on the compensation of the CEO and directors. The Compensation Committee has delegated to the CEO authority to set compensation for other officers, however, the Compensation Committee and the Board review such compensation. |
| (b) |
Disclose whether or not the Board has a Compensation Committee composed entirely of independent directors. If the Board does not have a Compensation Committee composed entirely of independent directors, describe what steps the Board takes to ensure an objective process for determining such compensation. |
The Compensation Committee is comprised of three directors who are all independent. |
| (c) |
If the Board has a Compensation Committee, describe the responsibilities, powers and operation of the Compensation Committee. |
Disclosure about the responsibilities, powers and operation of the Compensation Committee is included in the Information Circular under the heading “Compensation Committee”. |
| 8. |
Other Board Committees |
| |
If the Board has standing committees other than the audit, compensation and nominating committees, identify the committees and describe their function. |
The Sustainability Committee is comprised of three
directors, two of them are independent.
The Board has no other committees other than as noted above.
From time to time, the Board will establish special independent committees as
required for good corporate governance. |
| 9. |
Assessments |
| |
Disclose whether or not the board, its committees and individual directors are regularly assessed with respect to their effectiveness and contribution. If assessments are regularly conducted, describe the process used for the assessments. If assessments are not regularly conducted, describe how the board satisfies itself that the board, its committees, and its individual directors are performing effectively. |
The Board and its committees, namely, the Corporate
Governance Committee, the Compensation Committee, the Audit Committee and Sustainability Committee, annually, and at such other times
as they deem fit, monitor the adequacy of information given to directors, communications between the Board and management and the strategic
direction and processes of the Board and its committees.
As part of the assessments, the Board and/or the committees
review their respective charters and conduct reviews of applicable corporate policies. |
| 10. |
Director Term Limits |
| |
Disclose whether or not the issuer has adopted term limits for the directors on its board or other mechanisms of board renewal and, if so, include a description of those director term limits or other mechanisms of board renewal. If the issuer has not adopted director term limits or other mechanisms of board renewal, disclose why it has not done so. |
The Company has not adopted term limits. The Corporate Governance Committee, however, considers the issue of board renewal on an annual basis when considering the slate of director nominees. |
| 11. |
Policies Regarding the Representation of Women on the Board |
| |
Disclose whether the issuer has adopted a written policy relating to the identification and nomination of women directors. If the issuer has not adopted such a policy, disclose why it has not done so. |
Currently 17% of the Board members are female. Even
though the Board has not adopted a written policy relating to the identification and nomination of female directors or a formal diversity
policy, the Board, through its direction to management, continues to promote diversity in the workplace.
The Company has adopted a Diversity and Inclusion Statement,
as stated below and posted on the Company’s website:
At Silvercorp, we strive to integrate diversity
and inclusion into all aspects of the Company and are committed to building a safe and inclusive space for all. Our core values of, Respect,
Equality, and Responsibility, guide our efforts and are at the forefront of our decision making across all levels. We value diversity
and are dedicated to the equitable treatment of all persons regardless of gender, race, ethnicity, nationality, religion, disability,
age, culture, or sexual orientation. We recognize that building an inclusive workplace means providing equal opportunities and safe working
environments, as well as cultivating and maintaining a Company culture based on fairness and respect. We are committed to implementing
such values and opportunities Company wide and aspire to eliminate the barriers that interfere with such opportunities. Ultimately, we
believe our people are our greatest asset, and our commitment to integrating diversity and inclusion will not only make us a better Company
but will also help us retain and attract the best workforce possible. |
| 12 |
Consideration of the Representation of Women in the Director Identification and Selection Process |
| |
Disclose whether and, if so, how the board or nominating committee considers the level of representation of women on the board in identifying and nominating candidates for election or re-election to the board. If the issuer does not consider the level of representation of women on the board in identifying and nominating candidates for election or re-election to the board, disclose the issuer’s reasons for not doing so. |
The Board is committed to fostering a diverse workplace
environment where: (i) individual differences and opinions are heard and respected;
(ii) employment opportunities are based on the qualifications
required for a particular position at a particular time, including training, experience, performance, skill and merit; (iii) and inappropriate
attitudes, behaviours, actions and stereotypes are not tolerated and will be addressed and eliminated.
While the Board informally monitors the Company’s
adherence to these principles, it continues to work towards formalizing its policy on diversity and establishing a formal process for
the evaluation of |
| |
|
compliance with the policy. While directors will be recruited and promoted based upon their qualifications, abilities and contributions, the Corporate Governance Committee has decided that it will take into account the benefits of gender diversity when making suggestions to the Board for nominations of new directors. It will also add gender diversity as criteria on which to annually assess its effectiveness. In fiscal 2018, one new female director was appointed to the Board. |
| 13 |
Consideration Given to the Representation of Women in Executive Officer Appointments |
| |
Disclose whether and, if so, how the issuer considers the level of representation of women in executive officer positions when making executive officer appointments. If the issuer does not consider the level of representation of women in executive officer positions when making executive officer appointments, disclose the issuer’s reasons for not doing so. |
Though the Company does not have any female executive
officers at this time, the Company has benefited from the distinguished service of a number of women in senior executive positions. From
2006 to 2015, Silvercorp’s CFOs were female.
While executive officers will continue to be recruited and
promoted based upon their qualifications, abilities and contributions, gender diversity is included in the list of contributions to be
considered when selecting candidates. |
| 14 |
Issuer’s Targets Regarding the Representation of Women on the Board and in Executive Officer Positions |
| (a) |
Disclose whether the issuer has adopted a target regarding women on the issuer’s board. If the issuer has not adopted a target, disclose why it has not done so. |
The Company has not adopted any targets for the number of women on the Board. The Company will consider it in the future. Also see responses to responses to sections 11, 12, and 13 above. |
| (b) |
Disclose whether the issuer has adopted a target regarding women in executive officer positions of the issuer. If the issuer has not adopted a target, disclose why it has not done so. |
The Company has not adopted any targets for the number of women in executive officer positions. The Company will consider it in the future. Also see responses to sections 11, 12, and 13 above. |
| 15 |
Number of Women on the Board and in Executive Officer Positions |
| |
Disclose the number and proportion (in percentage terms) of directors on the issuer’s board who are women. |
There is currently one female director on the Board representing 17% of the Board. There are currently no women in executive officer positions. |
53
S R L Q