Silvercorp Metals Inc.

Silvercorp Metals Inc.

March 30, 2006 10:26 ET

Silvercorp Receives Mining Permit on Ying Silver Project, Henan, China

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - March 30, 2006) - Silvercorp Metals Inc. ("Silvercorp") is very pleased to report that it has received a mining permit issued by the Department of Land and Resources of Henan Province, covering 9.945 square kilometers of the SGX area within the Ying Silver Project, where the major exploration effort by Silvercorp has been focused. The permit was issued on the terms applied for, and allows operation of a 600 tonne per day underground mine within the permit area to produce silver, lead and zinc ores. The production rate can be increased in the future through amending the existing mining permit when expanded resource estimates have been filed with the Department of Land and Resources of Henan.

As planned, the 35,000 metres of exploration and development tunneling completed during the last 18 months allows mining operations to be commenced immediately without incurring further capital expenditures. Between now and March 31, 2007, Silvercorp anticipates the production rate will gradually reach the designed 600 tonnes per day capacity, for total production during the period of 140,000 tonnes of materials, containing 70,000 tonnes of high grade ores plus 70,000 tonnes of waste rock. The anticipated grades for the 70,000 tonnes of high grade ores are 45 ounces per tonne silver, 32% lead, and 6.6% zinc. The average realized prices net of smelter charges and value added tax during the first 3 months of 2006 (based on US$3.1 million revenues already realized from exploration production during the period) are US$7.6 per ounce for silver, US$0.46 per pound for lead, and US$0.62 per pound for zinc.

Silvercorp will focus on demonstrating the ability to mine narrow veins to the full designed production capacity, as well as constructing a 600 tonne per day mill. In addition, Silvercorp has also planned a program of 31,000 metres (m) of mining, development, and exploration tunnels and 32,800m of drilling, including 71 underground holes (25,705m) and 16 surface holes (7,090m) for 2006 in order to expand the high grade silver resources at the Ying project. The approximately US$15 million budget for the mining production, exploration and development program will be financed entirely from anticipated production revenues.

Development of the Ying Project is 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 statements.

Contact Information

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