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SILVERCORP FORECASTS 20% INCREASE IN
SILVER PRODUCTION FOR FISCAL YEAR 2013
VANCOUVER,
British Columbia � February 9, 2012 � Silvercorp Metals Inc. (�Silvercorp� or the �Company�) today released production
guidance for fiscal year ending
March 31, 2013. The Company forecasts
its silver production to increase by 20%, gold production to increase
by 90%, and lead and zinc production to increase by
12% and 63% respectively, marking
the 8th consecutive year
of increases in the Company�s
silver production.
Forecast for fiscal year
2013
Production
Guidance
From the four mines at the Ying Mining Camp,
production is expected to
increase to 695,000 tonnes of ore at a grade of 295g/t silver,
0.5g/t gold, 5.1% lead and 1.5% zinc, yielding 5.9
million ounces of silver,
3,350 ounces of gold, and 87 million pounds of lead
and zinc. The cash and total production costs
are expected to be approximately $68 and $85 per tonne of ore, respectively, representing approximately a 3% and 5% increase,
respectively, compared to
actual production costs incurred in the nine months ended December 31, 2011.
The GC mine in Guangdong Province is expected to commence initial
production in the second quarter of fiscal 2013. It is
expected to mine 160,000 tonnes and to mill 153,000 tonnes of ore, yielding
approximately 630,000 ounces
of silver and 12 million pounds of lead and zinc.
The cash and total production costs are expected to be approximately $40 and $65 per tonne of ore, respectively.
The BYP mine in Hunan Province is expected to mine and mill 175,000 tonnes of ore, yielding
approximately 13,590 ounces
of gold at cash and total production costs of $35 and $60 per tonne of ore, respectively.
At the newly-acquired XHP
mine and XBG mine, the Company will
focus on exploration during fiscal 2013, with only a minimal amount of by-product ore expected to be produced.
The Company�s
Production Guidance for fiscal 2013 is summarized as follows:
Capital Expenditures Budget
The total capital expenditures
for fiscal 2013 is estimated
at $89.1 million for mine development,
mill construction, and other
capital items (e.g. surface infrastructures and facilities, land use rights, reporting and permitting) plus
exploration expenditures of $9.8 million to complete a 206,000 m surface and underground drilling program, for a total of $98.9 million. The
budget estimate is based on contracts on hand,
designs by qualified Chinese
engineering firms, and the Company�s
past operating experience
in China. A summary of the Company�s fiscal 2013 capital budget is
as follows:
The
Ying Mining District
The capital expenditures
for the Ying, TLP, LM and HPG mines and central mills
are budgeted at $46.6
million, including:
- 4,900 m ramps
budgeted at $4.8
million.
- several vertical shafts, declines and raises totaling 4,500 m with a
budget of $5.7 million.
- 100,000 m of horizontal
tunnels for development and mining exploration budgeted
at $19.3 million.
- mill equipment, tailing and surface facilities
budgeted at $11.2
million.
- $5.6 million exploration expenditure for the 144,200 m surface and
underground drilling program at the four mines of the Ying Mining
Camp.
The
GC Mine
At GC mine, the
capital expenditures for fiscal 2013 are budgeted at $32.2 million, of which $12.8 million is for mine
development, $17.5 million is
for mill and infrastructure and $1.9 million is for a 26,400 m underground drilling
program. A substantial portion of GC mine�s operation will be built
in fiscal 2013, including:
- 1,500 m ramp
budgeted at $1.7
million. The ramp is
4.2 m by 3.6 m dimension and 2,224 m in length,
with total capital expenditures
of $3 million.
- 800 m vertical shafts budgeted at $3.0 million. The main shaft
has a 6 m diameter, starting
at 248 m elevation
and bottoming at
-370 m elevation for a total depth of 618 m. In addition, 290 m
ventilation shafts will
also be completed in fiscal 2013. The total project expenditures for
the vertical shafts amount
to $4.0 million.
- 9,400 m horizontal tunnels will be completed in fiscal 2013, with
a budget of $6.3 million.
- A 1,600 t/d mill will be completed in July 2012,
with total capital expenditures
of $12.5 million, of which $7.7 million will be incurred in fiscal 2013.
- Remaining $3.5 million in land use right payments
will be made in
fiscal 2013 to secure titles.
Total capital expenditures for land
acquisition amounts to $7 million.
- Power grid,
office and accommodations, labs, warehouses and other
surface facilities will
also be built in fiscal 2013 with a budget of $8.1 million.
Total GC mine development
and mill construction budget is
$54 million (excluding $13 million contingency). A summary
of capital expenditures is
as follows:
The
BYP Mine
The capital expenditures
for fiscal 2013 are budgeted at
$12.6 million, including:
- a
1,000 t/d mill with
a budget of $9.2 million
- a
180 m shaft of $0.6 million
- 3,400 m horizontal tunnels of
$1.4 million
- a
backfilling facility
of $0.8 million
- surface facilities
of $0.4 million
- $0.2 million exploration expenditures for a 1,800 m surface drilling program
XHP
Project and XBG Project
During the fiscal
2013, the Company�s focus on these
two newly-acquired projects will be a 33,600 m surface and underground drilling
program, budgeted at approximately $2.1 million. In addition, $3.9
million of capital expenditures is
budgeted for mine development,
exploration tunneling and upgrading existing mills. The Company is also
planning to prepare an initial NI 43-101 resource report for the properties
during fiscal 2013.
Silvertip Project
The Company has budgeted $1.5 million to complete
and submit an application for a Small Mine Permit.
Myles Gao, P.Geo., President and Chief Operating Officer of Silvercorp, is a Qualified Person for Silvercorp
under NI 43-101 and has reviewed
and given consent to the technical
information contained in this
press release.
About
Silvercorp Metals Inc.
Silvercorp Metals Inc. 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
project in northern
British Columbia. 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.
For
further information: SILVERCORP
METALS INC., Rui Feng, Chairman & CEO and Lorne
Waldman, Corporate Secretary, Phone: (604) 669-9397, Fax: (604) 669-9387, Toll Free 1(888) 224-1881, Email: info@silvercorp.ca, Website: www.silvercorp.ca.
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
District; 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.
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