Silvercorp Metals Inc.
TSX : SVM

Silvercorp Metals Inc.

July 10, 2007 09:01 ET

Silvercorp Signed Joint Venture Contract to Explore Two Silver-Polymetallic Mineral Properties in Qinghai Province, China

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 10, 2007) - Silvercorp Metals Inc. (the "Company") (TSX:SVM) announces that it has signed a joint venture contract with Qinghai Geological Survey ("QGS") to form Qinghai Found Mining Company Ltd. ("Qinghai Found"), a Sino-foreign cooperate joint venture company, to explore and develop the Na-Bao silver-polymetallic Project in Qinghai Province. Under the joint venture contract, the Company can earn an 82% interest in Qinghai Found by investing about US$4.0 million. QGS will retain an 18% carried interest in Qinghai Found in exchange for transferring the three Na-Bao permits to Qinghai Found.

Na-Bao Project

The Na-Ba Project is located in the Na-Bao area of southwest Qinghai province about 100 km west of the Qinghai-Tibet Railway. It consists of three exploration permits covering an area of about 320 square km (19 km by 16 km) . The Na-Bao Project was discovered through 1:200,000 and 1:50,000 scale stream sedimentary geochemical surveys completed in 2006 which revealed a 10 km long by 6 km wide silver-lead geochemical anomalies in the centre of the Project area. A follow-up field check of the anomalies has discovered two silver-polymetallic prospects within the anomalies. The No.1 prospect is made of two parallel, over 1,000 metre (m) structural zones that show significant silver-lead-zinc sulfide mineralization, as evidenced by massive galena (lead mineral) and sphalerite (zinc mineral). Based on a 2006 Qinghai Geological Survery ("QGS") report, the mineralization zones contain as high as 71.06% lead and 23.99% Zinc. The No. 2 prospect shows outcrop of copper-iron skarn, grab sample of which returned 4.8% copper, 25.1% total iron, and 41.8 grams per tonne silver.

Currently, the Company has engaged QGS to carry out an exploration program, including 50 square km of geological mapping, 30 square km of IP geophysical survey, and 10,000 cubic metres of surface trenching. The field season is generally from May to October.

XG Project

The Company has also signed a letter of intent with QGS to jointly explore the XG silver polymetallic project, which consists of two exploration permits (the XGE and XR Permits) owned by QGS and totaling about 161 square km, 460 km southeastern of the Na-Bao project. With the establishment of Qinghai Found, the XG project permits will also be transferred to Qinghai Found in exchange for a cash payment to QGS. Golder Association Consulting Ltd. of Australia ("Golder") completed a NI 43-101 technical report on the XG Project in November 2006.

Based on the Golder report, in the XGE permit area, 4 major stream sedimentary geochemical anomalies were identified. Surface trench exploration on one of the geochemical anomalies discovered the XGE silver-copper-lead mineralization zone, which is about 2200m long and 250m wide. Within the zone, four mineralized structures ranging from 130m to1600m in length and 1m to 45m in width were identified by trenches. The Significant trench interval includes 7.6 metres grading 1920 gram/tonne (g/t) silver and 2.47% copper. The assay result for the trenches are listed in the table below.

In the western XR permit area, 6 silver stream sedimentary anomalies were identified. Surface trench work in one of the geochemical anomalies has discovered four mineralized structures ranging from 150m to 2,200m in length and 3m to 45m in width within a 2.5 km by 1 km area. The assay results for the trenches are listed in the table below.



Trench Assay Results
---------------------------------------------------------------------------
Sample length Grade
-----------------------------------------------------
Trench Prospect (metre) Ag g/t Cu % Pb % Zn %
---------------------------------------------------------------------------
TC5 3.80 76 1.01 0.005 0.007
---------- -----------------------------------------------------
TC6 6.20 7 2.48 0.010 0.060
---------- -----------------------------------------------------
TC11 0.41 124 1.2 0.004 0.040
---------- XGE -----------------------------------------------------
TC17 1.00 3 0.88 0.002 0.015
---------- -----------------------------------------------------
TC3 23.70 714 1.05 0.370 0.430
---------- -----------------------------------------------------
Including 7.60 1920 2.47 0.440 0.630
---------------------------------------------------------------------------
TC1 XR 4.60 1 - 10.970 0.340
---------- -----------------------------------------------------
TC14 21.30 30 - 3.160 2.180
---------- -----------------------------------------------------
Including 1.50 71 - 12.660 2.720
---------- -----------------------------------------------------
TC14 6.00 114 - 19.680 0.140
---------- -----------------------------------------------------
TC15 2.00 98 - 15.270 0.170
---------- -----------------------------------------------------
TC13 4.20 48 - 2.670 0.280
---------- -----------------------------------------------------
TC3W 8.00 193 - 7.930 0.700
---------- -----------------------------------------------------
Including 4.50 321 - 13.150 1.130
---------- -----------------------------------------------------
TC3E 4.50 88 - 2.680 0.070
---------- -----------------------------------------------------
TC9 5.90 245 - 7.230 0.310
---------- -----------------------------------------------------
TC11 3.00 10 - 3.000 8.720
---------- -----------------------------------------------------
TC12 2.80 5 - 2.530 0.870
---------- -----------------------------------------------------
TC16 1.30 3 - 0.700 0.009
---------- -----------------------------------------------------
QJ3 4.10 111 - 23.930 0.210
---------- -----------------------------------------------------
QJ2 4.00 106 - 4.940 0.450
---------- -----------------------------------------------------
QJ1 5.50 182 - 7.080 0.120
---------- -----------------------------------------------------
Including 2.00 364 0.15 14.020 0.020
---------------------------------------------------------------------------
Golder Check Grab sample (TC9
sample of XR Prospect) 305 - 10.960 -
---------------------------------------------------------------------------


Both Na-Bao and XG Projects are subject to receive final approvals from regulatory authorities.

Quality Control of Assay results

The samples were collected by the Qinghai Geological Survey, a Qinghai Provincial government agency in charge of exploration of mineral resource in the Province. The samples were assayed in Qinghai Geological Central Laboratories ("QGCL"), an ISO9001-2000 certified lab which also is accredited by Chinese National Accreditation Board for Laboratories.

The sample preparation consists of drying, crushing, splitting of samples to 150 grams, then the samples are pulverized to 200 mesh. Silver, lead, zinc, and copper were analyzed by a 3-hour hot aqua regia digestion on 10-gram samples with an AA/ICP finish. Check samples by Golder was assayed in Tianjian SGS Laboratory, China.

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

About Silvercorp Metals Inc.

Silvercorp Metals Inc. is engaged in the acquisition, exploration, and development of silver related mineral properties focusing in the People's Republic of China ("China"). Currently, the Company's main mining operations are the Ying Silver-Lead-Zinc mine ("Ying Silver Project") and the Hou-Ping Gou Silver-Gold-Lead-Zinc mine ("HPG Project"), owned through its 77.5% and 70% Chinese subsidiary companies, respectively.

The Company is on the S&P/TSX Composite Index, the S&P/TSX Global Gold Index, and S&P/TSX Global Mining Index.

CAUTIONARY DISCLAIMER -- FORWARD LOOKING STATEMENTS

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, development, and mining. Production and revenue projections are based not on mineral reserves but on mineral resources which do not have demonstrated economic viability. As a result, actual results may vary materially from those described in the forward-looking statements. There can be no assurance that such forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on such statements. The Company does not undertake to update any forward-looking statements that are incorporated by reference herein, except in accordance with applicable securities laws. The Company expressly disclaims any obligation to update any forward-looking statements. We seek safe harbour.

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