Silvercorp Metals Inc.
TSX : SVM

Silvercorp Metals Inc.

January 15, 2007 09:00 ET

Silvercorp Acquires Sixty Percent Interest in the HPG Gold-Silver-Lead Property, Henan, China

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Jan. 15, 2007) - Silvercorp Metals Inc. ("Silvercorp") (TSX:SVM) is pleased to announce that it has received all necessary government approvals, including approval from the Ministry of Commerce of China, to form a joint venture company to explore and develop the HPG gold-silver-lead property. The HPG property consists of two adjacent mining licenses surrounded by one exploration permit of approximately 6.4 square kilometres in total within the Ying Silver Project area in Henan, and a 200 tonne per day flotation mill and associated facilities. The business license for the joint venture company, Henan Huawei Mining Co. Ltd. (Huawei) has been issued. Silvercorp has made all required payments to the vendor and has contributed the required investment to Huawei, to earn a 60% interest in Huawei, which is the operator and 100% interest holder of HPG properties. Transfer of the mining licenses and exploration permit from the vender to the Huawei is currently in process. The acquisition of the HPG property is an important step in consolidating and adding to the mining cash flow and mineral resources of the Ying silver project area.

The HPG permit areas are considered to be the extension of the Silvercorp's Ying property and show similar geology to the Ying property. About twenty mineralized gold-silver-lead veins were identified in the HPG properties, however only two veins, H15 and H17, which have lengths of approximately of 1400 metres and 2700 metre respectively, were targets of exploration and mining activities. The mining activities were carried out on 720-metre, 570-metre, 540-metre, 420-metre and 380-metre levels, and exploration was on 698-metre, 630-metre, 500-metre, 460-metre, 380-metre, 360-metre and 340-metre levels for H15 and H17 veins, focusing only on 700 metre long sections for both veins. The underground workings above the 420-metre level are used to explore and mine H15 vein, and tunnels below the 500-metre level are used to explore and mine the H17 vein, which has not been explored above the 500-metre level.

Silvercorp is reviewing the current operating situation and has planned an extensive exploration and mining program. The mining production will first be revived by early March 2007. Meanwhile, several levels of drift tunnels will be developed along the H15 and H17 vein and a series of cross-cut tunnels will be developed to explore other known veins. In order to increase the hoisting capacity and improve ventilation for mining on the H15 and H17 veins, a 120 metre deep vertical shaft is also planned from the 340-metre level to 460-metre level where the main decline can access the surface at 600-metre elevation. Currently, the existing 200 tonnes per day flotation mill recovers silver, gold and lead. Additional flotation cells will be added to recover zinc and copper which have been assayed as high as 7.84% zinc and 1.044% copper in the H17 vein on the 380-metre level.

Myles Gao, P.Geo, is Silvercorp's Qualified Person on the project under NI 43-101.

SILVERCORP METALS INC.

Statements in this press release other than purely historical information, including statements relating to the Company's future plans and objectives or expected results, constitute forward-looking statements. Forward-looking statements are based on numerous assumptions and are subject to all of the risks and uncertainties inherent in the Company's business, including risks inherent in mineral exploration and development. As a result, actual results may vary materially from those described in the forward-looking statements.

Contact Information

  • Silvercorp Metals Inc.
    Rui Feng
    Chairman & CEO
    (604) 669-9397
    or
    Silvercorp Metals Inc.
    Cathy Fong
    President
    (604) 669-9397
    (604) 669-9387 (FAX)
    Email: info@silvercorp.ca
    Website: www.silvercorp.ca