Silvercorp Metals Inc.
TSX : SVM

Silvercorp Metals Inc.

May 17, 2006 09:00 ET

Silvercorp Metals Inc.: New Tunnel Intersects 1.1 Metre Width Containing 6,124 Grams or 197 Ounces Per Tonne Silver and 50% Lead & Zinc on the S8 Vein, Ying Silver Mine, Henan, China

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - May 17, 2006) - Silvercorp Metals Inc. ("Silvercorp") (TSX:SVM) is pleased to provide an update on exploration tunnel results on S7-1, S8, S16, S16E, S16W, and S16W1 veins for the period from February 1st to April 30th 2006. In addition to extensive mine development and preparation for production after its receiving the mining permit in late March, Silvercorp is also continuing to carry out intensive exploration tunneling and drilling. A total of 2,366 metres (m) of exploration tunnels have been completed, including 1,934m of tunnels on the above six veins. The assay results from the new tunnels are listed in the Table below.

The significant results from the new tunnels are:

- 1.1m true width grading 6,124 grams per tonne (g/t) or 196.89 ounces per tonne (oz/t) silver (Ag), 43.31 % lead (Pb), 7.01% zinc (Zn) and 0.94% copper (Cu) at 640m elevation on the S8 vein.

- 2.25m true width grading 1,839 g/t (59.11 oz/t) Ag, 23.14% Pb, and 14.27% Zn at 534m elevation and 2.3m true width grading 1,565 g/t (50.33 oz/t) Ag, 22.20% Pb, and 6.33% Zn at 606m elevation on the S16W vein.

- 0.30m true width containing 1,949 g/t (62.66 oz/t) Ag, 25.32% Pb, and 21.03% Zn at 640m elevation on the S7-1 vein.

- 0.30m true width grading 4,675 g/t (150.31 oz/t) Ag, 41.55% Pb, and 4.11% Zn at 480m elevation on the S14 vein.

- 0.50m true width carrying 2,153 g/t (69.22 oz/t) Ag, 16.54% Pb, and 12.06% Zn at 534m elevation on the S16E vein.

- 0.40m true width grading 3,849 g/t (123.75 oz/t) Ag, 25.30% Pb, and 2.65% Zn at 640m elevation on the S16W1 vein.

S7-1 Vein

During the period, 93.5m of drifting on the S7-1 vein was completed on 560m elevation through access tunnel CM103, of which 83.5m exposed massive galena sheets. Ongoing exploration continues to drift to both north and south directions along the vein from CM103.

S8 Vein

The tunneling program on the S8 vein during the period was carried out on five levels and a total of 937 m drifting were completed with detail below:

- at 640m elevation, 55m drift in tunnel PD700 and 249m in main access tunnel CM101 in which over 30m drift exposed massive galena sheets;

- at 600m elevation, 185m drift in tunnel PD66 at the YLG camp (1.5 kilometers north of the SGX camp).

- at 570m elevation, 200m drift through main access tunnel CM102 of which over 25m contains massive galena sheets;

- at 550m elevation, 55m drift in tunnel YM01 at the YLG camp;

- at 510m elevation, 193m drift in tunnel YPD01 at the YLG camp;

S14 Vein

On the S14 vein, 66m of drifting and three raises totaling 104m were completed from the 480m elevation through main access tunnel CM102. The drift was developed immediatly south of an ancient stope and exposed 0.15 to 0.45m true width of massive galena sheets. Three raises on S14 vein all show complete massive galena sheets. Surface and underground drilling has also intercepted massive galena sheets on several elevations with assay results pending.

S16E Vein

A total of 323m of drifting along the S16E vein were completed at the three levels. These included 93m at 640m elevation from CM101, 48m at 610m elevation and 183m at 534m elevation through CM102.

S16W Vein

The S16W vein was explored through three levels and 401m of drifts were completed along the vein. In adit PD680, 127m of drifting was done at 680m elevation and has just exposed massive galena sheets with assays pending. Other drifting includes 102m at 650m elevation in PD650, 152m at 610m elevation and 21m at 534m elevation in CM102. At 610m elevation, a continuous massive galena sheet of over 85m in length is exposed.

S16W1 Vein

The vein has been encountered by both tunneling and drilling over a length of 750m along the strike and 250m in down dip. All of the 43m of drifting at 640m elevation in CM101 and 34m of tunnel at 570m elevation in CM102 completed during the period exposed massive galena sheets.



Table: Assay Results
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Mine- Eleva- Dis- True Ag Ag Pb Zn Ag Ag Cu
ral- tion tance Width (g/t) (oz/t) (%) (%) Equi- Equi- (%)
ized (m) to (m) valent valent
Veins South (g/t) (oz/t)
of (i) (i)
CM103
(m)
-----------------------------------------------------------------------
S7-1 560 -35 0.30 1223 39.32 29.64 8.51 2878 92.52 N/A
560 -30 0.26 159 5.12 0.14 32.53 1709 54.95 N/A
560 -25 0.15 266 8.54 9.83 33.84 2287 73.53 N/A
560 -20 0.28 610 19.60 31.72 13.32 2581 82.97 N/A
560 -15 0.15 1077 34.63 29.96 15.82 3092 99.42 N/A
560 -10 0.10 2326 74.78 7.38 29.57 4041 129.93 N/A
560 20 0.10 1179 37.91 1.16 29.91 2648 85.13 N/A
560 25 0.15 672 21.62 2.62 25.73 2005 64.45 N/A
560 30 0.20 884 28.41 0.84 32.55 2464 79.23 N/A
560 35 0.15 743 23.90 8.77 23.09 2209 71.04 N/A
560 40 0.30 1949 62.66 25.32 21.03 4016 129.11 N/A
560 50 0.20 264 8.49 23.83 0.81 1308 42.06 N/A
-----------------------------------------------------------------------
S8 640 493 1.00 6391 205.48 26.05 3.30 7647 245.86 3.78
640 498 1.00 4134 132.91 17.17 1.69 4939 158.79 4.67
640 503 1.10 6124 196.89 43.31 7.01 8284 266.35 0.94
640 508 0.40 903 29.04 13.89 3.84 1672 53.74 0.25
640 513 0.90 1301 41.83 9.19 3.14 1838 59.09 0.79
640 518 0.70 748 24.03 7.16 9.99 1524 48.99 0.68
600 -243 0.40 454 14.59 9.39 22.38 1913 61.49 N/A
600 -226 0.15 284 9.13 16.60 19.35 1903 61.18 N/A
570 35 0.25 619 19.90 16.74 10.98 1847 59.37 N/A
570 40 0.65 238 7.66 26.06 8.42 1738 55.87 0.10
570 45 0.60 277 8.91 50.14 8.52 2797 89.94 0.14
570 630 0.10 446 14.35 46.76 3.18 2570 82.64 0.28
570 647 0.35 149 4.80 27.75 1.46 1390 44.68 0.08
510 -992 1.25 140 4.50 28.51 1.62 1420 45.65 0.07
510 -987 0.35 460 14.80 40.80 1.32 2245 72.17 0.12
510 -982 0.40 N/A 0.00 32.93 1.48 1460 46.93 0.10
510 -975 0.40 381 12.24 40.68 0.17 2105 67.69 N/A
-----------------------------------------------------------------------
S14 510 476 0.60 1398 44.95 27.59 2.78 2694 86.62 N/A
506 476 0.20 2538 81.60 32.64 4.14 4112 132.20 N/A
504 479 0.30 1608 51.70 38.16 0.78 3255 104.66 N/A
500 480 0.30 4675 150.31 41.55 4.11 6623 212.95 N/A
497 415 0.32 903 29.05 26.90 0.89 2081 66.90 N/A
494 419 0.30 768 24.68 10.03 2.21 1296 41.66 N/A
489 479 0.50 1560 50.16 14.16 15.56 2896 93.12 N/A
486 426 0.18 2302 74.01 35.20 2.59 3910 125.72 N/A
486 481 0.50 837 26.89 11.19 18.21 2173 69.87 N/A
483 429 0.30 2115 67.99 46.47 2.62 4200 135.03 N/A
480 591 0.15 1238 39.80 37.88 0.95 2882 92.64 N/A
480 596 0.24 1459 46.91 14.71 0.64 2110 67.84 N/A
480 600 0.32 1865 59.96 24.86 0.39 2933 94.28 N/A
480 606 0.30 3240 104.17 56.24 3.16 5763 185.29 N/A
480 616 0.20 1080 34.72 19.55 2.08 2004 64.42 N/A
480 621 0.20 2209 71.02 48.38 1.90 4341 139.56 N/A
480 626 0.30 4301 138.28 46.74 1.33 6336 203.72 N/A
480 636 0.45 452 14.53 17.11 3.45 1338 43.01 N/A
480 653 0.20 3743 120.35 48.33 1.56 5857 188.31 N/A
-----------------------------------------------------------------------
S16E 610 555 0.80 365 11.73 2.09 18.22 1318 42.37 N/A
610 560 0.28 443 14.23 15.89 5.87 1392 44.74 N/A
610 565 0.40 790 25.39 23.59 8.51 2189 70.38 N/A
610 585 0.50 905 29.08 5.33 2.91 1268 40.75 N/A
534 764 0.25 341 10.96 7.79 36.00 2379 76.48 N/A
534 769 0.20 488 15.68 7.59 19.01 1711 54.99 N/A
534 773 0.50 2153 69.22 16.54 12.06 3423 110.07 N/A
534 779 0.25 2680 86.16 8.97 16.42 3838 123.40 N/A
534 810 0.40 198 6.35 2.41 41.47 2268 72.91 N/A
534 815 0.40 803 25.82 41.88 16.09 3334 107.19 N/A
534 820 0.25 1561 50.19 30.17 16.50 3617 116.30 N/A
534 825 0.30 609 19.58 20.02 9.73 1916 61.59 N/A
534 833 0.30 472 15.17 22.88 28.93 2811 90.37 N/A
534 849 0.40 938 30.15 29.26 24.38 3330 107.06 N/A
534 854 1.00 137 4.40 12.36 20.01 1608 51.70 N/A
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S16W 655 40 0.10 1660 53.37 23.04 13.17 3258 104.73 N/A
655 34 0.45 1336 42.94 16.46 13.09 2652 85.25 N/A
655 29 0.45 653 20.99 21.86 8.10 1960 63.01 N/A
655 25 1.30 1075 34.57 20.94 13.84 2616 84.10 N/A
655 22 0.80 1225 39.40 12.51 26.98 3034 97.55 N/A
655 18 0.47 1631 52.43 14.77 25.56 3467 111.48 N/A
655 3 0.90 369 11.87 6.39 14.93 1348 43.33 N/A
610 502 0.08 1094 35.17 25.47 8.69 2581 82.99 N/A
610 507 0.15 1250 40.19 26.74 16.09 3142 101.02 N/A
610 512 0.15 1474 47.39 36.10 9.29 3438 110.55 N/A
610 517 0.15 368 11.83 17.89 8.56 1529 49.16 N/A
610 522 0.10 293 9.40 16.92 12.51 1600 51.45 N/A
610 547 0.30 835 26.84 10.72 20.67 2269 72.93 N/A
610 552 0.40 1396 44.88 35.05 13.77 3529 113.45 N/A
610 557 0.20 693 22.29 11.22 11.37 1707 54.87 N/A
610 587 0.20 858 27.59 1.60 15.09 1642 52.79 N/A
606 382 2.30 1565 50.33 22.20 6.33 2803 90.11 N/A
605 360 1.05 653 20.99 8.14 6.12 1287 41.37 N/A
603 330 0.30 680 21.87 18.62 0.87 1507 48.46 N/A
534 352 0.20 109 3.49 20.59 7.09 1314 42.25 N/A
534 362 0.30 608 19.56 28.48 4.58 2028 65.19 N/A
534 372 0.12 800 25.72 25.10 1.52 1931 62.09 N/A
534 377 0.10 4094 131.64 55.52 0.99 6484 208.47 N/A
534 253 2.25 1839 59.11 23.14 14.27 3493 112.29 N/A
534 259 0.80 2251 72.39 27.11 4.11 3591 115.45 N/A
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S16W1 650 273.5 0.80 1297 41.69 7.79 21.93 2667 85.73 N/A
650 279 1.00 196 6.29 6.39 21.63 1492 47.97 N/A
640 279 0.57 827 26.60 18.01 17.02 2395 77.01 N/A
640 286 1.10 580 18.66 6.24 9.61 1300 41.79 N/A
640 291 0.40 945 30.39 5.35 14.38 1854 59.60 N/A
640 296 0.50 549 17.65 3.16 20.30 1646 52.92 N/A
640 301 0.40 755 24.26 2.68 24.18 2016 64.81 N/A
640 306 0.45 1501 48.24 42.19 8.33 3676 118.20 N/A
640 311 0.80 764 24.58 12.42 27.94 2615 84.07 N/A
640 316 0.80 1652 53.11 14.53 8.89 2687 86.39 N/A
640 321.6 0.40 3849 123.75 25.30 2.65 5042 162.12 N/A
570 660 0.12 2207 70.96 18.04 21.61 3994 128.42 N/A
570 667 0.30 1822 58.58 22.83 6.77 3107 99.89 N/A
570 672 0.80 638 20.50 8.30 19.04 1892 60.82 N/A
570 677 0.55 2332 74.98 8.96 4.77 2937 94.41 N/A
534 276 0.50 1999 64.27 22.34 2.90 3079 99.00 N/A
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(i) Silver equivalent grade is calculated on the basis of US$6.5/oz Ag,
US$0.40/lb for Pb, and US$0.45/lb for Zn. Copper grade is not included
in the calculation.


Tunnel plan and longitudinal maps of the veins are available on the Company's website: www.silvercorp.ca.

Mine Development and Mill Construction

Major mining development at the Ying mine is progressing well and on schedule. Ten shrinkage stopes are currently being mined at the Ying site and it is anticipated that an additional 12 to 15 stopes will be mined in six months to reach a phase one mining capacity of 600 tonne per day (tpd). As a minimum of five portals access to 13 mineralized veins in which high-grade ore shoots have been delineated, the Company expects that in time it can reach its production goal, without incurring substantial capital cost.

Construction of the 600 tonne per day mill for the Ying mine commenced on May 1st and the mill access road is almost finished. The mill is expected to start-up in February 2007.

A total of 430m of shaft sinking have been completed, including 123m, 127m, and 180m for No. 1, 2 and 3 shafts, respectively. These three shafts will be commissioned by the end of 2006. The production for the first three years is planned to come mainly through horizontal portals and thereafter, shafts will be used.

Exploration and mining at the Ying mine is being carried out through Silvercorp's 77.5% subsidiary, Henan Found Mining Co. Ltd., a Sino-foreign joint venture company which holds 100% of the Ying Project and operates under a 30-year business license. Myles Gao, P.Geo, is the Company's Qualified Person on the project under NI 43-101.

Quality Control

The Company's Quality Control/Quality Assurance Program is disclosed in the January 4, 2006 Press Release.

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 statement.

Contact Information

  • Silvercorp Metals Inc.
    Rui Feng
    Chairman & CEO
    (604) 669-9397
    or
    Silvercorp Metals Inc.
    Cathy Fong
    VP Corporate Development
    (604) 669-9397
    (604) 669-9387 (FAX)
    info@silvercorp.ca
    www.silvercorp.ca