Silvercorp Metals Inc. (“Silvercorp” or the “Company”) (TSX/NYSE
American: SVM) is pleased to report the results of an updated
National Instrument 43-101 Technical Report with an effective date
of June 30, 2019 (Mineral Resources and Mineral Reserves effective
December 31, 2018), prepared by AMC Mining Consultants (Canada)
Ltd. (“AMC”) on the Gaocheng silver-zinc-lead property (the “GC
Mine”) in Guangdong Province, People’s Republic of China (the
“Gaocheng NI 43-101 Technical Report”).
The four authors of the Gaocheng NI 43-101
Technical Report all qualify as independent Qualified Persons. Two
of the authors visited the GC Mine in January 2018. AMC examined
all aspects of the project, including drill core, underground
workings, processing plant and surface infrastructure. The Gaocheng
NI 43-101 Technical Report will be made available for review on the
SEDAR system and on the Company’s website at www.silvercorp.ca in
due course.
Highlights of the Gaocheng NI 43-101
Technical Report
From the start of operations at the GC Mine in
2014 through to December 31, 2018, 1,251,000 tonnes have been mined
at average head grades of 96 g/t silver, 1.5% lead and 2.7%
zinc.
Despite mine production depletion, there has
been a 7% increase in tonnes of Proven and Probable Reserves
compared to the Mineral Reserve estimate in the previous Technical
Report (effective date of report June 30, 2018).
Based on Proven and Probable Reserves only, the
GC Mine has a projected life of mine (LOM) of 12 years through to
2031, at an average annual production rate of approximately 300,000
tonnes, and with average silver equivalent grades1 of approximately
334 g/t for the first six years and then 271 g/t for the remainder
of the mine life. The GC Mine also has the potential to extend the
LOM beyond 2031, via conversion of existing Mineral Resources to
Mineral Reserves, and further exploration and development.
Measured and Indicated Mineral Resource tonnes
increased by 42%, which is due to an increase in the number of
veins and conversion of Inferred material to a higher
classification level. Inferred tonnes have decreased by
3%.
The results of the underground drilling program
at the GC Mine show that vein structures are still open at
depth.
______________________________
1The equivalency formula is Ag g/t + 46.1*Pb% +
42.8*Zn% using prices of $18/oz Ag, $1.00/lb Pb and $1.25/lb Zn,
estimated recoveries of 77% Ag, 88% Pb, and 84% Zn, and respective
payables of 85%, 90% and 70%.
2018 Mineral Reserve and Mineral
Resource Update
Silvercorp completed its first phase of diamond
drilling at the GC Mine in 2008. Systematic drilling commenced on
the property in 2011 and continued through to 2018. The previous
independent Mineral Resource and Mineral Reserve estimates on the
property were at December 31, 2017 (Technical Report effective date
June 30, 2018). All Silvercorp drilling was completed as NQ-sized
core. Drillhole collars were surveyed using a total station and
down hole surveys were completed every 50 m downhole. Core
recoveries varied between 42% and 100%, averaging 97%.
Mineral Reserves
The Mineral Reserve estimates for the GC Mine
were prepared by Silvercorp under the guidance of an independent
Qualified Person, Mr. H. A. Smith, P.Eng, of AMC, who takes QP
responsibility for those estimates. The assumption has been made
that current stoping practices will continue to be employed at the
GC Mine, namely predominantly shrinkage stoping (73% of projected
LOM) but also with some cut and fill resuing (27% of projected
LOM), using hand-held drills and hand-mucking within stopes, and
loading to mine cars by rocker-shovel or by hand. Minimum mining
widths of 1.0 m for shrinkage and 0.5 m for resuing are
assumed.
Average dilution beyond planned mining widths
has been estimated at between 13% and 14%, while assumed mining
recovery factors are 92% for shrinkage stopes and 95% for resuing
stopes.
The Gaocheng NI 43-101 Technical Report defines
Mineral Reserves of 3.82 million tonnes in the Proven and Probable
categories, grading 95 g/t Ag, 1.5% Pb, and 3.2% Zn, containing
11.7 million ounces of silver, 125 million pounds of lead, and 271
million pounds of zinc. Mineral Reserve tonnes are noted to be 42%
of Mineral Resource (Measured plus Indicated) tonnes. Silver, lead,
and zinc Mineral Reserve grades are 113%, 125% and 114%,
respectively, of the corresponding Measured plus Indicated Mineral
Resource grades. Metal content conversions for silver, lead, and
zinc from Measured plus Indicated Mineral Resources to Proven plus
Probable Mineral Reserves are 48%, 53% and 48%, respectively.
Mineral Reserves are detailed in Table 1 below.
|
Table 1: GC Mine - Mineral Reserves |
|
Reserve |
Tonnes |
Ag |
Pb |
Zn |
Contained metal |
classification |
(kt) |
(g/t) |
(%) |
(%) |
Ag (koz) |
Pb (Mlbs) |
Zn (Mlbs) |
Proven |
1,865 |
94 |
1.6 |
3.5 |
5,611 |
65 |
142 |
Probable |
1,955 |
96 |
1.4 |
3.0 |
6,064 |
60 |
129 |
Proven and Probable |
3,820 |
95 |
1.5 |
3.2 |
11,675 |
125 |
271 |
Notes to Mineral Reserve Statement: |
Full breakeven cut-off grades: Shrinkage = 200 g/t AgEq: Resuing =
245 g/t AgEq. |
Marginal material cut-off grade: Shrinkage = 160 g/t AgEq; Resuing
= 205 g/t AgEq. |
Dilution (zero grade) assumed as a minimum of 0.1 m on each wall of
a shrinkage stope and 0.05 m on each wall of a resuing stope. |
Mining recovery factors assumed as 95% for resuing and 92% for
shrinkage. |
Metal prices: Silver US$18/troy oz, lead US$1.00/lb, zinc
US$1.25/lb, with respective payables of 85%, 90% and 70%. |
Processing recovery factors: Ag – 77%, Pb - 88%, Zn – 84%. |
Effective date December 31, 2018. |
Exchange rate assumed is RMB 6.50: US$1.00. |
Rounding of some figures may lead to minor discrepancies in
totals. |
Mineral Reserve cut-off grade and key estimation parameters are
shown in Table 2 below. |
|
Table 2: Mineral Reserve Cut-off Grades and Key Estimation
Parameters |
|
Item |
GC Mine |
Foreign exchange rate (RMB:US$) |
6.5 |
6.5 |
|
Shrinkage |
Resuing |
Operating costs |
|
|
Mining cost (includes development & exploration) ($/t) |
35.39 |
53.29 |
Milling cost ($/t) |
15.06 |
15.06 |
G&A and product selling cost ($/t) |
6.82 |
6.82 |
Sustaining & non-sustaining capital ($/t) |
6.33 |
6.33 |
Mineral Resources tax, etc. ($/t) |
6.90 |
6.90 |
Total operating costs (US$/t) |
70.50 |
88.40 |
Mining recovery (%) |
92 |
95 |
Mill recoveries |
|
|
Ag (%) |
77 |
77 |
Pb (%) |
88 |
88 |
Zn (%) |
84 |
84 |
Breakeven COG (AgEq g/t) |
200 |
245 |
Metal price assumptions: Ag $18/oz; Pb $1.00/lb; Zn $1.25/lb;
respective payables of 85%, 90%, and 70%. |
|
Mineral Resources:
The Mineral Resource estimates for the GC Mine
were prepared by Mr Shoupu Xiang, Resource Geologist of Silvercorp,
and were reviewed by an independent Qualified Person, Ms. Dinara
Nussipakynova, P.Geo of AMC, who takes responsibility for the
estimates. Resources were estimated using a block modelling
approach, with Micromine™ software. Interpolation was carried
out using inverse distance cubed (ID3) for all the veins. Estimates
were made for a total of 110 mineralized vein structures for the GC
Mine.
The Mineral Resources are reported above a
cut-off of 100 g/t silver equivalent (AgEq). Cut-off grades are
based on in situ values in AgEq terms in grams per tonne (after
application of mining recovery and payable values) and incorporate
all mining and processing costs (no capital, G&A, or
exploration drilling and tunnelling costs) provided by Silvercorp
and reviewed by AMC.
Mineral Resources at December 31, 2018 total 9.1
million tonnes (inclusive of Mineral Reserves) in the Measured and
Indicated categories, grading 84 g/t Ag, 1.2% Pb, and 2.8% Zn,
containing approximately 24.5 million ounces of silver, 233
million pounds of lead, and 564 million pounds of zinc and are
detailed in Table 3 below.
|
Table 3: GC Mine - Measured & Indicated
Resources (Inclusive of Mineral Reserves), and
Inferred Mineral Resources |
|
Resource |
Tonnes |
Ag |
Pb |
Zn |
Contained metal |
classification |
(Mt) |
(g/t) |
(%) |
(%) |
Ag (koz) |
Pb (Mlbs) |
Zn (Mlbs) |
Measured |
3.366 |
96 |
1.4 |
3.3 |
10,350 |
107 |
246 |
Indicated |
5.686 |
77 |
1.0 |
2.5 |
14,155 |
126 |
318 |
Measured and Indicated |
9.052 |
84 |
1.2 |
2.8 |
24,505 |
233 |
564 |
Inferred |
7.245 |
91 |
1.0 |
2.4 |
21,167 |
166 |
391 |
Notes: CIM Definition standards (2014) were used for reporting the
Mineral Resources |
Mineral Resources are reported at a cut-off grade of 100 g/t
AgEq |
The equivalency formula is Ag g/t+46.1*Pb% + 42.8*Zn% using prices
of $18/oz Ag, $1.00/lb Pb and $1.25/lb Zn and estimated recoveries
of 77% Ag, 88% Pb, and 84% Zn. |
Sample results up to 31 December 2018. |
Mineral Resources that are not Mineral Reserves do not have
demonstrated economic viability. |
The numbers may not compute exactly due to rounding. |
Source: Silvercorp, reproduced as a check by AMC Mining Consultants
(Canada) Ltd. |
|
Qualified Persons
D. B. Nussipakynova, P.Geo., H. A. Smith,
P.Eng., A. Riles, MAIG and P. R. Stephenson, P.Geo. of AMC Mining
Consultants (Canada) Ltd. are Qualified Persons as defined by
National Instrument 43-101. D. B. Nussipakynova, H. A. Smith, P. R.
Stephenson and A. Riles have reviewed and consented to this press
release and believe it fairly and accurately represents the
information in the Technical Report that supports the
disclosure.
About Silvercorp
Silvercorp is a profitable Canadian mining
company producing silver, lead and zinc metals in concentrates from
mines in China. The Company’s goal is to continuously create
healthy returns to shareholders through efficient management,
organic growth and the acquisition of profitable projects.
Silvercorp balances profitability, social and environmental
relationships, employees’ wellbeing, and sustainable development.
For more information, please visit our website at
www.silvercorp.ca.
For further information
Lon ShaverVice PresidentSilvercorp Metals
Inc.
Phone: (604) 669-9397Toll Free: 1(888)
224-1881Email: investor@silvercorp.ca Website:
www.silvercorp.ca
CAUTIONARY DISCLAIMER - FORWARD-LOOKING
STATEMENTS
Certain of the statements and information in
this news release constitute “forward-looking statements” within
the meaning of the United States Private Securities Litigation
Reform Act of 1995 and “forward-looking information” within the
meaning of applicable Canadian provincial securities laws
(collectively, “forward-looking statements”). Any statements or
information that express or involve discussions with respect to
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or be achieved, or the negative of any of these terms and similar
expressions) are not statements of historical fact and may be
forward-looking statements. Forward-looking statements relate to,
among other things: the price of silver and other metals; the
accuracy of mineral resource and mineral reserve estimates at the
Company’s material properties; the sufficiency of the Company’s
capital to finance the Company’s operations; estimates of the
Company’s revenues and capital expenditures; estimated production
from the Company’s mines in the Ying Mining District and the GC
Mine; timing of receipt of permits and regulatory approvals;
availability of funds from production to finance the Company’s
operations; and access to and availability of funding for future
construction, use of proceeds from any financing and development of
the Company’s properties.
Forward-looking statements are subject to a
variety of known and unknown risks, uncertainties and other factors
that could cause actual events or results to differ from those
reflected in the forward-looking statements, including, without
limitation, risks relating to: fluctuating commodity prices;
calculation of resources, reserves and mineralization and precious
and base metal recovery; interpretations and assumptions of mineral
resource and mineral reserve estimates; exploration and development
programs; feasibility and engineering reports; permits and
licences; title to properties; property interests; joint venture
partners; acquisition of commercially mineable mineral rights;
financing; recent market events and conditions; economic factors
affecting the Company; timing, estimated amount, capital and
operating expenditures and economic returns of future production;
integration of future acquisitions into the Company’s existing
operations; competition; operations and political conditions;
regulatory environment in China and Canada; environmental risks;
foreign exchange rate fluctuations; insurance; risks and hazards of
mining operations; key personnel; conflicts of interest; dependence
on management; internal control over financial reporting; and
bringing actions and enforcing judgments under U.S. securities
laws.
This list is not exhaustive of the factors that
may affect any of the Company’s forward-looking statements.
Forward-looking statements are statements about the future and are
inherently uncertain, and actual achievements of the Company or
other future events or conditions may differ materially from those
reflected in the forward-looking statements due to a variety of
risks, uncertainties and other factors, including, without
limitation, those referred to in the Company’s Annual Information
Form under the heading “Risk Factors”. Although the Company has
attempted to identify important factors that could cause actual
results to differ materially, there may be other factors that cause
results not to be as anticipated, estimated, described or intended.
Accordingly, readers should not place undue reliance on
forward-looking statements.
The Company’s forward-looking statements are
based on the assumptions, beliefs, expectations and opinions of
management as of the date of this news release, and other than as
required by applicable securities laws, the Company does not assume
any obligation to update forward-looking statements if
circumstances or management’s assumptions, beliefs, expectations or
opinions should change, or changes in any other events affecting
such statements. For the reasons set forth above, investors should
not place undue reliance on forward-looking statements.
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