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Silvercorp Metals Inc. Provides Major Update on El Domo Project Budget and Timeline

Silvercorp Metals Inc., a Canadian mining company renowned for its silver, gold, lead, and zinc production, has recently updated the budget and timeline for its El Domo Project, a critical development in Ecuador. Originally estimated at $240 million, the budget has now escalated to $284 million, reflecting an increase of $44 million since the last estimate on March 31, 2025. This substantial adjustment comes as the company aims to enhance project delivery while also navigating various construction challenges.

Breakdown of Budget Increases

The updated budget reveals that key factors contributed to the overall cost increases:

1. VAT Rate Adjustment: The value-added tax (VAT) was recalibrated from 10% to 15%, leading to an additional cost of $16 million. This adjustment represents 36% of the total budget increase, although there is anticipation of recovering this VAT once operations commence.
2. Construction Package Adjustments: Construction for Package #1 has risen by $5.1 million due to detailed design modifications, including enhancements to waste dump buttressing.
3. Equipment Costs: Equipment and materials for the processing plant have surged by $15 million, primarily due to previously overlooked equipment that has become essential for the updated design specifications.
4. Logistics Overestimations: Underestimated logistics costs now reflect an increase of $4 million, incorporating the costs associated with freight, customs, and local transportation.
5. Additional Infrastructure Investments: The construction of external facilities, such as bypass roads and powerline connections, has also contributed to the budget expansion, with an added $5.6 million investment for enhancements.
6. Owner’s Cost Adjustments: Owner-related expenses have risen from $30 million to $32.5 million, adjusting for an overestimation of the previous construction timeline and increased operational costs.
7. Contingency Provision: The contingency fund has been reduced from 20% to 8%, reflecting more precise estimates while concurrently accounting for potential increases in diesel prices and other relevant factors.

Project Timeline Update

With the budget revisions in place, the El Domo Project is now set to initiate production on July 1, 2027, marking a delay of six months from previous projections. The company anticipates that strategic planning and ongoing stakeholder collaboration will ensure that essential milestones are met.

Progress Made in 2025

2025 marked a year of significant achievement for the El Domo Project. Over the past year, substantial groundwork was laid, and various construction preparations were completed. Key accomplishments included:

• - Investment of $44.5 million in development activities, representing roughly 16% of the new budget.
• - Successful clearance of 1,040 archaeological units, enabling the next phase of earth-moving activities under proper environmental permits.
• - The relocation and movement of over 2.6 million cubic meters of earth for site preparation, road expansion, and construction of key facilities, ensuring robust site access and environmental management.
• - Establishment of a construction camp with a capacity of over 600 beds to support the workforce on-site.
• - Successful negotiations to secure a mining contract with China Railway 19th Bureau Group Co., Ltd. for ongoing mining operations, expected to start soon.

These milestones reflect Silvercorp’s commitment to transparent operations and efficient project management, despite the setbacks posed by environmental and logistical challenges inherent in large-scale mining.

Future Prospects

With strategic engagements with local communities and stakeholders, Silvercorp aims to advance the El Domo Project while prioritizing responsible mining practices. As the company refines its plans and engages in further investment of local supply chains, the focus remains on deriving long-term value for stakeholders and the environment throughout the project lifecycle. The continued development of El Domo is expected to enhance Silvercorp’s position in the mining sector and contribute positively to the local economy in Ecuador.

In summary, while the El Domo Project is facing increased costs and a revised timeline, Silvercorp’s commitment to building robust and sustainable mining operations holds promise for the future.