News Summary
On December 22, 2025, Silvercorp released the results of a Preliminary Economic Assessment (PEA) for its 100%-owned Condor gold project in Ecuador. The study outlines an underground mining operation with a 13-year life of mine (LOM). Key metrics include an after-tax NPV (5%) of $522 million and an IRR of 29% at base case prices ($1,850/oz Au). However, at “near-spot” prices ($2,700/oz Au), the NPV(5%) jumps to $1.559 billion with an IRR of 61%. The project requires initial capital of $292 million to produce an average of 105,700 oz of gold per year, with life-of-mine All-In Sustaining Costs (AISC) estimated at $1,258/oz.
Material Impact
This news is materially positive as it defines a legitimate “third leg” for Silvercorp, complementing its producing China operations and the El Domo project currently under construction.
– Valuation Support: The near-spot NPV of $1.56 billion represents nearly 60% of the company’s current market cap, suggesting significant unrecognized value if the project advances to feasibility.
– Diversification: Successfully moving Condor toward production would further reduce Silvercorp’s jurisdictional dependency on China, which currently provides over 90% of its operating income.
– Execution Risk: The PEA relies heavily on Inferred resources (12.1 Mt at 3.55 g/t Au), which are geologically speculative. The $292M initial capex is substantial, and while the company has $381M in cash, it is also funding the $240M El Domo construction simultaneously.
– Jurisdictional Context: While the Ecuadorian Constitutional Court upheld the El Domo license in July 2025, anti-mining sentiment remains a persistent, albeit currently non-material, threat in the region.
Catalysts
– El Domo Construction Progress: Updates on the 1.29 million cubic meters of material removed and the execution of “Bid Package 2” (stripping and mining) expected by early 2026.
– Condor Permitting: Watch for the approval of environmental licenses and water permits required to begin the exploration tunnels at Condor.
– Ying Capacity Expansion: Final approval for the TLP-LM permit to increase capacity to 600,000 tonnes per year, which would bring total Ying capacity to 1.32 million tonnes.
– CFO Appointment: The transition from Interim CFO Winnie Wang to a permanent successor.
Materiality Conclusion
The Condor PEA is a Material – Positive development. It transforms an exploration asset acquired in the Adventus deal into a quantified development project with robust economics. While speculative due to its PEA status and reliance on inferred resources, the scale of the NPV at current metal prices provides a significant fundamental floor for the stock’s recent valuation surge.
