Silvercorp Metals Inc.

Silvercorp Metals Inc.

October 03, 2005 09:00 ET

Silvercorp Earns its Full 77.5% Interest in the Ying Silver Project, Henan, China-Mining Permit Process is Well Underway

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Oct. 3, 2005) - Silvercorp Metals Inc. ("Silvercorp")(TSX VENTURE:SVM) is pleased to announce that it has earned its full 77.5% interest in the Ying High-Grade Silver Project two years ahead of schedule. All required cash payments to the Chinese partner and capital contributions to the joint venture Company have been made under the joint venture contract with a subsidiary company of the Henan Provincial Non-Ferrous Geological Bureau. Silvercorp now holds 77.5% of the joint venture Company, Henan Found Mining Co. Ltd., which holds 100% of the Ying Silver Project, located in Henan Province, China. With the 77.5% interest earned, Silvercorp intends to acquire additional land positions in the area, consolidating the Ying silver district, which is larger in size than the Couer d'Alene silver camp in Idaho. Silvercorp will also actively review other advanced silver properties in China for acquisition.

The 2005 exploration and development program is ahead of schedule with about 2,500 metres (m) of tunnels and 1,500m of underground drilling completed each month. The work is expected to significantly expand and upgrade silver resources while preparing for production once the mining permit is obtained. At the current pace we expect to exceed the 2005 program of 17,000m of underground tunneling, three vertical 330m deep shafts, and 10,000m of underground drilling. Twenty-eight professional geologists, engineers and surveyors are on site, overseeing 400+ miners working on over 40 development and exploration tunnel faces and 4 underground drill rigs on a day-to-day basis. With the mining permit targeted for spring of 2006, it is expected that theYing project will have over 25 km of tunnels and three shafts completed, thereby providing broad access to immediately commence production.

The Mining Permit application process is also well underway. The key reports required by regulation for issuing the mining permit are:

1. Resource Utilization Plan ("RUP") Report to be reviewed by the China Non-Ferrous Metal Association, with the Health and Safety section of the Report reviewed by the Provincial Safety Production Bureau. The RUP Report has been completed by Changsha Engineering & Research Institute of Nonferrous Metallurgy;

2. The Environmental Assessment ("EA") Report to be reviewed by the Provincial Environment Protection Bureau. The Environmental Assessment Guideline Report which forms the base for EA Report has been completed by a qualified Chinese Environmental Engineering company, and the EA Report is underway; and

3. The Geological Hazards Assessment Report which is now being prepared by a qualified geo-engineering firm.

Once all these documents are collected the mining permit application will be filed with the Ministry of Land and Resources in Beijing.

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.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy or this release.

Contact Information

  • Silvercorp Metals Inc.
    Rui Feng
    Chairman & CEO
    (604) 669-9397
    (604) 669-9387 (FAX)
    Silvercorp Metals Inc.
    Cathy Fong
    VP Corporate Development
    (604) 669-9397
    (604) 669-9387 (FAX)