Silvercorp Metals Inc.
TSX : SVM
NYSE : SVM

Silvercorp Metals Inc.

August 20, 2012 08:00 ET

Silvercorp Reports Intercept of 4.55 Metres Grading 2,196 Grams per Tonne Silver, 13.63% Lead and 1.38% Zinc at the LM Mine, Ying Mining District, Henan Province, China

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 20, 2012) - Silvercorp Metals Inc. ("Silvercorp" or the "Company") (TSX:SVM)(NYSE:SVM) is pleased to report the results of its on-going underground diamond drilling program for the first six months of 2012 at the LM Mine and the LM Mine West ("LM West"), Ying Mining District, Henan Province, China. The 22,999 metre ("m") drilling program has substantially extended the downdip and striking extensions of previously defined mineralization zones within some major vein structures. A number of blind parallel mineralized vein structures were discovered in association with major known veins. It is expected that these results will further expand the mineral resource as set out in the National Instrument ("NI") 43-101 Technical Report dated May 1, 2012 for the Ying Mining District.

Drilling at LM Mine

At the LM mine area, the underground drilling program was conducted from underground tunnels on level 830m to test the downdip and striking extensions of major mineralized vein structures LM2, LM5 and LM6. A total of 5,024m in 15 holes was completed with two underground rigs and 375 core samples were collected in the first half of 2012. As of June 30, 2012 the Company received assay results for 13 holes drilled in 2012 as well as three holes drilled in December 2011. Of the 16 holes the Company received assay results for 12 holes intercepted high-grade silver-lead-zinc zones. Mineralization zones in the vein structures LM5 and LM6 have been obviously extended to their northeast strike direction and to the depth from the current production sections.

Drilling at LM West

At LM West, total drilling in the first half of 2012 was 17,974m in 41 completed core holes using six underground drill rigs and resulted in the collection of 1,973 core samples. The holes were designed to extend and expand the known mineralization zones previously defined in the major vein structures LM7, LM8, LM12, LM13 and LM17. By the end of June 2012, the Company received assay results for 33 holes drilled in the first half of 2012 and 10 holes which were drilled in December 2011. Of those assay results received, 35 of the 43 holes intercepted high-grade silver-lead-zinc zones while the remaining holes intercepted vein structures with weak mineralization or alteration. The high-grade mineralization zone in vein structure LM8 has been successfully traced for approximately 300m downdip to the 450m elevation. A high-grade copper-gold-silver zone with 4.65% copper ("Cu"), 3.34 grams per tonne ("g/t") gold ("Au") over 2.34m was intercepted in a single exploration hole, which may indicate exploration potential for copper and gold to the west of the current LM Mine West production area.

Table 1 below lists assay results for 47 holes that intercepted significant mineralization at the LM Mine and the LM Mine West. Highlights of selected intercepts are as follows:

LM Mine:

  • Hole ZKL5604 intercepted 1.21m of Vein LM5E grading at 545 g/t silver ("Ag"), 3.10% lead ("Pb") and 0.53% zinc ("Zn") at the 592m elevation;

  • Hole ZKX12802 intercepted 6.81m of Vein W6 grading 314 g/t Ag, 1.99% Pb and 0.40% Zn at the 784m elevation, including a 0.22m interval grading 1,087 g/t Ag, 16.39% Pb and 7.57% Zn and a 1.31m interval grading 959 g/t Ag, 4.29% Pb and 0.08% Zn;

  • Hole ZKL5405 intercepted 4.55m of LM2 grading 2,196 g/t Ag, 13.63% Pb and 1.38% Zn at the 724m elevation, including a 3.18m interval grading 3,091 g/t Ag, 17.00% Pb and 1.92% Zn;

  • Hole ZKL6005 intercepted 2.51m of Vein LM5W grading 754 g/t Ag, 5.56% Pb and 0.77% Zn at the 564m elevation, including a 0.38 interval grading 1,307 g/t Ag, 4.46% Pb and 0.51% Zn.

LM West:

  • Hole ZKX11121 intercepted 2.45m of Vein LM16 grading 408 g/t Ag, 3.64% Pb and 0.23% Zn at the 737m elevation;

  • Hole ZKX0605 intercepted 1.10m of Vein LM12 grading 1,485 g/t Ag, 1.83% Pb and 0.12% Zn at the 873m elevation;

  • Hole ZKX0803 intercepted 0.94m of Vein LM8 grading 538 g/t Ag, 0.95% Pb and 0.05% Zn at the 921m elevation;

  • Hole ZKX10804 intercepted 0.94m of Vein LM8 grading 1,371 g/t Ag, 0.91% Pb and 0.28% Zn at the 456m elevation, including a 0.54m interval grading 2,227 g/t Ag, 1.36% Pb and 0.45% Zn;

  • Hole ZKX11002 intercepted 1.18m of Vein LM8 grading 904 g/t Ag, 2.35% Pb and 0.86% Zn at the 650m elevation, including a 0.63m interval grading 1,642 g/t Ag, 4.30% Pb and 1.56% Zn;

  • Hole ZKX3601 intercepted a 3.45m of Vein LM16 grading 413g/t Ag, 5.16% Pb and 0.15% Zn at the 811m elevation, including a 1.02m interval grading 1,290 g/t Ag, 16.42% Pb and 0.43% Zn;

  • Hole ZKX0931 intercepted a 2.34m of a new copper-gold-silver zone grading 46 g/t Ag, 3.34 g/t Au and 4.65% Cu.

All intervals are reported as down-hole lengths and are not corrected to true widths for the mineralized intervals as drill holes typically cut mineralization at variable angles and geometries of mineralized zones remain speculative until further drilling is completed.

Table 1: Selected drill hole results from the LM Mine and the LM Mine West
Drill Hole From (m) To (m) Interval Elevation Ag (g/t) Pb (%) Zn (%) Au (g/t) Cu (%) Mineralized
Vein
LM Mine
ZKL5406 315.76 316.09 0.33 497 121 2.75 1.26 <0.10 0.03 LM5
330.22 330.37 0.15 484 269 0.32 0.09 0.53 0.02 vein parallel to LM5
360.73 360.95 0.22 455 865 1.27 0.30 3.43 0.06 vein parallel to LM5
ZKL5407 142.90 143.67 0.77 651 153 0.28 0.67 0.02 0.09 vein parallel to LM6W
227.98 228.16 0.18 567 243 0.32 0.13 0.08 0.06 LM6W
256.27 258.82 2.55 536 182 0.42 0.16 0.02 0.09 LM6
Including 257.72 257.87 0.15 1117 4.94 0.91 0.02 0.29 LM6
ZKL6401 347.46 347.86 0.40 732 104 0.76 0.30 0.02 0.02 LM5
ZKL6402 229.20 229.35 0.15 715 377 1.17 0.16 0.00 0.14 LM6
ZKL5604 296.95 298.16 1.21 592 545 3.10 0.53 0.04 0.25 LM5E
ZKL5605 121.69 122.32 0.63 695 168 3.19 3.93 0.01 0.01 vein parallel to LM6W
188.95 189.25 0.30 641 116 1.49 0.98 0.08 0.02 vein parallel to LM6W
192.99 193.54 0.55 638 221 1.06 0.87 0.01 0.08 LM6W
223.11 223.43 0.32 614 47 4.17 0.30 0.00 0.01 LM6
ZKL6601 346.81 347.39 0.58 690 165 0.30 1.47 0.00 0.03 LM5
ZKL0803 293.65 294.17 0.52 577 364 0.00 0.01 0.00 0.02 vein parallel to LM1
ZKL0802 167.47 167.81 0.34 711 303 0.01 0.02 0.04 0.01 vein parallel to LM1
ZKL0104 152.15 152.59 0.44 687 13 5.34 0.53 0.05 0.01 LM2-2
155.00 155.42 0.42 684 129 1.55 0.35 0.05 0.04 vein parallel to LM2-2
242.35 242.55 0.20 602 1504 2.99 1.32 0.26 0.28 vein parallel to LM2-2
ZKL5405 58.89 60.12 1.23 743 381 8.18 0.29 0.07 0.04 LM2 Branch
Including 59.29 59.72 0.43 835 20.41 0.57 0.12 0.09 LM2 Branch
77.91 82.46 4.55 724 2196 13.63 1.38 0.14 0.31 LM2
Including 79.04 82.22 3.18 3091 17.00 1.92 0.17 0.43
111.13 111.53 0.40 700 186 1.27 0.13 0.05 0.02 LM2 Branch
ZKL6005 177.00 177.40 0.40 658 59 1.35 0.22 0.05 0.02 LM6E
270.36 272.87 2.51 564 754 5.56 0.77 0.20 0.17 LM5W
Including 271.79 272.17 0.38 1307 4.46 0.51 0.15 0.29 LM5W
414.25 414.62 0.37 425 151 0.59 0.81 0.27 0.02 LM5
429.90 430.08 0.18 410 50 2.62 1.83 0.12 0.01 LM5E
LM Mine West
ZKX1331 106.09 106.65 0.56 880 41 8.56 0.33 0.69 0.04 new zone
153.52 154.65 1.13 196 1.15 0.13 0.01 0.01 new zone
304.37 307.06 2.69 19 5.36 0.02 0.02 0.00 W5
ZKX12803 17.35 43.99 2.29 147 0.09 0.09 0.01 0.08 new zone
ZKX3203 314.47 314.87 0.40 684 109 0.18 0.08 0.02 0.03 new zone
ZKX2201 102.26 102.43 0.17 908 209 0.14 0.07 0.02 0.12 new zone
ZKX11121 26.41 26.57 0.16 989 92 3.94 0.11 0.02 0.03 LM14
419.56 422.01 2.45 737 408 3.64 0.23 0.09 0.67 LM16
ZKX1531 262.91 263.08 0.17 794 143 0.05 0.19 0.02 0.08 vein parallel to W5
268.18 268.39 0.21 791 259 0.78 0.95 0.07 0.02 vein parallel to W5
ZKX0105 422.92 423.12 0.20 549 330 1.01 0.04 0.02 0.00 LM13
541.40 542.67 1.27 341 0.15 0.03 0.10 0.16 LM12_2
565.51 568.12 2.61 423 78 2.17 0.71 0.29 0.05 LM12_1
569.55 570.85 1.30 421 109 0.15 0.04 0.06 0.01 LM12
ZKX12804 24.97 25.23 0.26 909 75 1.17 0.50 0.00 0.05 new zone
248.37 249.47 1.10 685 64 1.41 0.06 0.00 0.02 vein parallel to W6
261.65 265.11 3.46 63 1.63 0.07 0.01 0.03 vein parallel to W6
325.03 325.88 0.85 184 0.16 0.01 0.00 0.02 vein parallel to W6
ZKX12601 92.77 93.72 0.95 117 0.24 0.07 0.01 0.01 W6
ZKX0905 191.55 192.06 0.51 743 312 1.57 0.18 0.03 0.58 LM10
ZKX11122 428.87 429.09 0.22 702 127 0.31 0.07 0.00 0.12 vein parallel to LM16
ZKX13001 149.13 149.42 0.29 853 249 1.03 0.08 0.00 0.04 W6E
155.56 155.76 0.20 850 108 2.96 0.36 0.00 0.07 vein parallel to W6E
ZKX0106 169.27 169.50 0.23 758 530 1.17 0.87 0.01 0.03 new zone
ZKX3401 96.03 96.68 0.64 903 109 1.99 0.08 0.01 0.01 new zone
ZKX1323 490.58 490.93 0.35 527 240 0.81 1.82 0.02 0.02 vein parallel to LM7
592.48 593.99 1.51 449 154 1.17 0.01 0.05 0.00 LM7
ZKX11123 366.92 367.27 0.35 706 153 0.27 0.05 0.00 0.03 vein parallel to LM16
ZKX0604 65.66 66.88 1.22 903 181 1.18 0.08 0.00 0.09 LM12
191.90 192.92 1.02 847 61 2.32 0.02 0.00 0.04 LM7
ZKX1123 164.63 164.89 0.26 791 119 3.07 0.09 0.02 0.01 vein parallel to LM11
571.80 572.95 1.15 24 3.90 0.05 0.06 0.13 LM7
ZKX0605 63.53 66.44 1.10 873 1485 1.83 0.12 0.03 0.48 LM12
Including 63.53 64.26 0.73 1882 1.83 0.13 0.01 0.62
70.31 70.59 0.28 869 85 0.63 0.24 0.01 0.20 vein parallel to LM12
163.52 164.09 0.57 786 101 0.41 0.02 0.00 0.02 vein parallel to LM7
ZKX0511 253.76 254.41 0.65 686 240 2.10 0.64 0.01 0.06 LM11
ZKX1723 386.08 387.36 1.28 571 2 3.51 0.02 0.00 0.00 LM12
538.51 538.69 0.18 441 59 4.19 0.03 0.10 0.06 vein parallel to LM7
ZKX11124 453.84 454.05 0.21 662 128 1.06 0.12 0.00 0.08 vein parallel to LM16
ZKX0606 162.88 163.68 0.80 768 5 6.87 0.04 0.03 0.00 vein parallel to LM7
ZKX11321 373.86 374.36 0.50 815 155 0.81 0.26 0.00 0.01 vein parallel to LM16
383.66 384.46 0.80 810 159 3.10 0.43 0.00 0.12 LM16
ZKX0803 58.80 59.74 0.94 921 538 0.95 0.05 0.00 0.11 LM12
137.28 137.43 0.15 908 43 2.48 0.13 0.02 0.05 LM12E
ZKX10804 224.36 224.93 0.57 759 16 2.86 0.09 0.01 0.01 LM8_3
544.47 545.41 0.94 456 1371 0.91 0.28 0.02 0.14 LM8
Including 544.87 545.41 0.54 2227 1.36 0.45 0.00 0.22 LM8
ZKX11001 40.43 41.42 0.99 945 17 2.46 0.10 0.00 0.00 vein parallel to LM8-3
71.24 72.09 0.85 925 183 0.83 0.15 0.00 0.04 LM8_3
140.01 140.71 0.70 879 242 0.61 0.11 0.01 0.02 LM8_2
ZKX11002 81.16 81.88 0.72 909 178 0.34 0.04 0.00 0.01 LM8_3
149.31 149.92 0.61 855 110 2.24 3.12 0.03 0.01 LM8_2
404.40 404.73 0.33 660 180 0.35 0.10 0.03 0.03 vein parallel to LM8
417.12 418.30 1.18 650 904 2.35 0.86 0.19 0.12 LM8
Including 417.12 417.75 0.63 1642 4.30 1.56 0.36 0.22
ZKX11003 165.63 166.71 1.08 830 32 2.48 1.32 0.02 0.01 LM8_2
208.23 208.68 0.45 795 32 5.39 0.50 0.00 0.01 vein parallel to LM8-2
242.06 242.68 0.62 766 97 2.67 0.08 0.01 0.02 vein parallel to LM8-1
356.82 357.42 0.60 668 464 0.34 0.04 0.01 0.03 LM8_1
502.41 504.73 2.32 544 228 2.06 0.37 0.03 0.10 LM8
Including 503.90 504.73 0.83 517 2.32 0.19 0.07 0.24
ZKX0931 382.58 384.92 2.34 766 46 0.01 0.05 3.34 4.65 new zone
ZKX0005 86.11 86.39 0.27 843 31 3.59 0.27 0.05 0.02 LM25
ZKX12802 143.70 153.81 6.81 314 1.99 0.4 0.07 0.07 vein parallel to W6
Including 149.52 149.74 0.22 1087 16.39 7.57 0.05 0.68 W6W
152.50 153.81 1.31 959 4.29 0.08 0.13 0.17 W6
282.19 286.92 4.73 655 96 1.88 0.17 0.05 1.55 W6E1
ZKX3201 371.98 374.81 2.01 175 1.03 0.06 0.05 0.16 vein parallel to LM17
Including 374.25 374.62 0.37 639 874 3.32 0.17 0.05 0.77 LM17
ZKX1323 490.58 490.93 0.35 527 240 0.81 1.82 0.02 0.02 vein parallel to LM7
592.48 593.99 1.51 449 154 1.17 0.01 0.05 0 LM7
ZKX3601 187.35 190.81 3.45 811 413 5.16 0.15 0.08 0.35 LM16
Including 189.19 190.21 1.02 811 1290 16.42 0.43 0.14 1.12 LM16
214.74 214.89 0.15 789 640 2.34 1.68 0.1 0.02 vein parallel to LM17

Quality Control

Drill cores are in NQ size. Drill core samples, limited by apparent mineralization contact or shear/alteration contact, were split into halves by saw cutting. The half cores are stored in the Company's core shacks for future reference and checking, and the other half core samples are shipped in security sealed bags to three labs: (1) the Analytical Lab of Henan Non-Ferrous Metals Geological and Exploitation Institute in Zhengzhou (Zhengzhou Nonferrous Lab); (2) the Henan Rock Minerals Testing Center in Zhengzhou (Henan Testing Center); and (3) the SGS lab in Tianjin. All labs are officially accredited labs in China. Adopted analytical methods in the three labs are as follows:

Zhengzhou Nonferrous Lab

The sample preparation consists of drying, crushing and splitting of a 250-gram subsample which is then pulverized to minus-200 mesh. Two-acid digestion and AAS finish are utilized on a 0.5-gram sample for silver, lead and zinc analysis. Titration is utilized as a modified process for higher grade materials.

Henan Testing Center

Sample is dried and crushed to minus 1mm and then split to a 200-300g subsample which is further pulverized to minus 200 mesh. Two subsamples are prepared from the pulverized sample. One is digested with aqua regia for gold analysis with AAS, and the other is digested with two-acids for analysis of silver, lead, zinc and copper.

SGS Lab

Sample is dried, crushed and split to a 250-gram subsample which is further pulverized to 85 per cent passing 200 mesh. Fire assay and AAS finish are utilized for gold assay. Four-acid digestion and ICP-AES finish are used in analyzing silver, lead, zinc and copper.

A routine quality assurance/quality control procedure is adopted at each lab to monitor the analytical quality at the lab. Certified reference materials ("CRM"), pulp duplicates and blanks are inserted into each lab batch of samples. QA/QC data at the lab are attached to the assay certificates for each batch of samples.

The Company maintains a comprehensive quality assurance and quality control program to ensure best practice in sample preparation and analysis of the drill core samples. Project geologists regularly insert CRM, field duplicates and blanks to each batch of core samples to monitor the sample preparation and analysis procedures at the labs. The analytical quality of the labs is further evaluated with external checks by sending about 3% of the pulp samples to higher level labs to check for lab bias.

Data from both the Company's and the labs' QA/QC programs are timely reviewed and evaluated by project geologists.

Rujin Jiang, P. Geo., is the Qualified Person on the project as defined under NI 43-101. He has verified the information and has reviewed and approved the contents of this news release.

About Silvercorp

Silvercorp is engaged in the acquisition, exploration, development and mining of high-grade silver-related mineral properties in China and Canada. Silvercorp is the largest primary silver producer in China through the operation of the four silver-lead-zinc mines at the Ying Mining District in the Henan Province of China. Silvercorp recently acquired the XBG and XHP silver-gold-lead-zinc mines nearby the Ying Mining District in Henan Province, further consolidating the region. Silvercorp has commenced production at its second production foothold in China, the BYP gold-lead-zinc project in Hunan Province, and is currently constructing the mill and related facilities in preparation for mining at the GC silver-lead-zinc project in Guangdong Province. In Canada, Silvercorp is preparing an application for a Small Mine Permit for the Silvertip high grade silver-lead-zinc mine project in northern British Columbia to provide a further platform for growth and geographic diversification. The Company's shares are traded on the New York Stock Exchange (symbol: SVM) and Toronto Stock Exchange (symbol: SVM) and are included as a component of the S&P/TSX Composite and the S&P/TSX Global Mining Indexes.

CAUTIONARY DISCLAIMER -- FORWARD LOOKING STATEMENTS

Certain of the statements and information in this press 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. Any statements or information that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "expects", "is expected", "anticipates", "believes", "plans", "projects", "estimates", "assumes", "intends", "strategies", "targets", "goals", "forecasts", "objectives", "budgets", "schedules", "potential" or variations thereof or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur 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 or information. Forward-looking statements or information 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 Camp; 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 or information 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 or information, 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; First Nations title claims and rights; 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 as per the requirements of the Sarbanes-Oxley Act; 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 or information. Forward-looking statements or information 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 or information due to a variety of risks, uncertainties and other factors, including, without limitation, those referred to in the Company's Annual Information Form for the year ended March 31, 2011 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 or information.

The Company's forward-looking statements and information are based on the assumptions, beliefs, expectations and opinions of management as of the date of this press release, and other than as required by applicable securities laws, the Company does not assume any obligation to update forward-looking statements and information if circumstances or management's assumptions, beliefs, expectations or opinions should change, or changes in any other events affecting such statements or information. For the reasons set forth above, investors should not place undue reliance on forward-looking statements and information.

Contact Information

  • Silvercorp Metals Inc.
    Rui Feng
    Chairman & CEO
    (604) 669-9397 or Toll Free 1(888) 224-1881
    (604) 669-9387 (FAX)

    Silvercorp Metals Inc.
    Jonathan Hackshaw
    Investor Relations Director
    (604) 669-9397 or Toll Free 1(888) 224-1881
    (604) 669-9387 (FAX)
    investor@silvercorp.ca
    www.silvercorp.ca