Shares of Canadian and Chinese mining company Silvercorp Metals (NYSEMKT:SVM) are down 12.4% as of 11:30 a.m. EST today. While there is no specific company news moving the stock, silver prices are down significantly today and they're taking the share price of Silvercorp with them.
With silver in the name, you can bet that silver is one Silvercorp's primary revenue drivers. According to management's most recent presentation, silver production accounts for 64% of all revenue.
Being highly dependent upon the price of silver means that any time the price of silver moves, so too will Silvercorp's stock price. Today, that means Silvercorp is on the losing side of things as the price of silver is down around 1.6% today to $23.37 per U.S. troy ounce.
Today's decline in silver prices is most likely attributed to today's broader market rally. Typically, surging stock prices in the broader markets mean that traders exit safe-haven investments like precious metals.
Silvercorp is a rather small miner with all of its production coming from two mines in China. It is highly leveraged to silver prices with additional revenue from lead and zinc mining.
The silver stock is profitable and generating a modest dividend for investors. At the same time, though, any investment in this stock comes with the risks associated with having overseas mining operations and deep exposure to volatile commodity markets.
With all of this in mind, it's hard to see today's dip as anything other than business as usual. The price decline isn't enough to consider buying the stock, nor is it a sign that the company is in any trouble. So we can chalk this one up to a "move along, nothing to see here" moment.