Silvercorp Update
Technical
Report Completed On The TLP-LM Project, Henan Province, China
VANCOUVER,
British Columbia � December 18, 2008 � Silvercorp
Metals Inc. (�Silvercorp� or �the Company�), China's largest primary
silver producer, is pleased to report that a new National Instrument (�NI�)
43-101 Technical Report on the TLP-LM project in the Ying Mining District of
Central China dated November 20, 2008 (the �Technical Report�), has been
completed and is available for review on the SEDAR system or on the Company�s
website at www.silvercorp.ca. The Technical Report and Pre-Feasibility
Study of the TLP and LM projects is based on the
development and exploration work completed by the Company from December 2007
to August 31, 2008.
The Technical Report is
authored by Chris Broili, C.P. Geo., L.P. Geo., and
Mel Klohn, L.P. Geo., both of BK Exploration
Associates; and Ron Moran, P.Eng., of Vetrin
Mine Planners. The authors are independent Qualified Persons as defined by
National Instrument 43-101.
Silvercorp is exploring and developing the
TLP property through its 77.5%-owned joint venture company, Henan Found
Mining Ltd., which acquired 100% ownership of the property in December
2007. The Company is exploring and developing the adjacent LM property
through its 70%-owned joint venture company, Henan Huawei
Mining Co. Ltd., which acquired 100% ownership of the LM property in November
2007.
The
following are highlights from the report:
From December 2007 to
August 31, 2008, Silvercorp completed a total of
21,307 m of tunnels, tunnel enlarging, drifts, declines, raises or shafts,
and 25,744 m of underground and surface drilling on the TLP and LM
properties. Channel sampling, exposures in underground tunnels and
underground drilling have defined sulfide-bearing
veins containing silver-lead-zinc mineral resources that are quantified in
the Technical Report. The mineralization identified to date at TLP occurs in
11 discrete tabular quartz-ankerite veins
consisting of massive sulfide zones averaging 1.56
m in width. At LM, the mineralization occurs in 14 quartz-veins with
massive sulfide zones averaging approximately 0.71
m in width.
The TLP�LM project area
is crossed by numerous mineralized structures. To date, at least 25 major
vein structures have been mapped in detail and an equal number of smaller
vein structures have been identified but not yet examined in detail. Mineralization
in the veins consists of silver-bearing galena and freibergite
accompanied by some sphalerite, chalcopyrite and
small amounts of pyrite. Much of the galena occurs as massive lenses of
sheared granular steely material, up to one meter thick and 100 m or more in
vertical and horizontal dimensions. The gangue consists mostly of
fine-grained silica with ankerite. The
mineralization in the TLP�LM project, as in the Coeur d�Alene District
(Idaho, USA), shows evidence of changes both laterally and to depth in
character and contained metal ratios, probably a result of district-scale zonation.
Mineral
Resources
The current estimated
mineral resources (at a 50 g/t Ag-equivalent cutoff)
of the veins defined at the TLP and LM mines are as follows:
|
|
|
|
Average Grade
|
Contained Metal
|
|
|
|
|
Ag
|
Ag
|
Pb
|
Ag equiv.
|
|
|
Silver
|
Mine
|
Resource
|
Width
|
|
Ag
|
Pb
|
equiv.
|
Category
|
(m)
|
Tonnes
|
g/t
|
oz/t
|
%
|
g/t
|
ounces
|
tonnes
|
ounces*
|
TLP
|
Measured
|
1.54
|
910,811
|
119
|
3.82
|
2.86
|
239.45
|
3,483,248
|
26,009
|
7,226,666
|
Indicated
|
1.56
|
3,247,978
|
145
|
4.66
|
2.17
|
236.29
|
15,132,435
|
70,334
|
25,207,201
|
Meas+Ind
|
1.56
|
4,158,789
|
139
|
4.48
|
2.32
|
236.98
|
18,615,683
|
96,343
|
32,433,867
|
Inferred
|
1.49
|
2,708,161
|
143
|
4.59
|
2.40
|
243.76
|
12,417,352
|
64,910
|
21,693,963
|
|
|
|
|
|
|
|
|
|
|
|
LM
|
Measured
|
0.64
|
118,397
|
254
|
8.17
|
2.17
|
345.6
|
967,327
|
2,567
|
1,354,959
|
Indicated
|
0.75
|
244,077
|
256
|
8.23
|
2.08
|
343.87
|
2,009,885
|
5,075
|
2,797,058
|
Meas+Ind
|
0.71
|
362,474
|
255
|
8.21
|
2.11
|
344.43
|
2,977,213
|
7,642
|
4,152,018
|
Inferred
|
0.57
|
106,531
|
238
|
7.67
|
2.93
|
362.07
|
816,572
|
3,122
|
1,274,891
|
*Ag Equivalent is
calculated using US$6.50/oz Ag, US$0.40/lb Pb and
US$0.45/lb Zn. Calculations reflect gross metal content and have not
been adjusted for metallurgical recoveries.
Mine
Plan and Economic Analysis
Based on a five-year mine
plan (years 2009 to 2013) developed in the accompanying prefeasibility study
portion of the Technical Report, the TLP mine is expected to produce a total
of 1,596,000 tonnes with an average grade of 212 g/t Ag and 2.67% Pb. The LM mine will produce 268,160 tonnes with an
average grade of 316 g/t Ag and 2.14% Pb.
The production projection
is based on Measured and Indicated mineral resources using the 150 g/t Ag
equivalent cutoff with 80 to 85% mining recovery
rates and 20 to 70% dilution factors. After 6,600 m of mine development
at a cost of US$2,105,447, the TLP and LM mines can ramp-up and sustain
production of over 1,000 and 150 tonnes per day, respectively. A
breakdown of the production schedule is as follows:
Five-year
Production Summary for the TLP and LM Mines
Year
|
TLP Mine
|
LM Mine
|
Tonnes
|
Ag (g/t)
|
Pb (%)
|
Tonnes
|
Ag (g/t)
|
Pb (%)
|
2009
|
252,000
|
163
|
2.71
|
44,520
|
338
|
1.68
|
2010
|
336,000
|
202
|
2.64
|
52,080
|
385
|
1.78
|
2011
|
336,000
|
216
|
2.78
|
51,149
|
323
|
2.23
|
2012
|
336,000
|
242
|
2.58
|
57,660
|
261
|
3.05
|
2013
|
336,000
|
225
|
2.64
|
62,571
|
289
|
1.85
|
Total
|
1,596,000
|
212
|
2.67
|
268,160
|
316
|
2.14
|
Based on metal prices of
US$9.50/oz Ag and US$ 0.60/lb Pb and assuming total
production cost of US$46.10 per tonne, Silvercorp�s
share of net profits generated from the planned 5-year mine production for
the TLP-LM project is US$26.06 million. Breakdown of each year�s net cash
flow is anticipated to be US$1.21 million for the first year, US$6.05 million
for the second year, US$6.73 million for the third year, US$6.39 million for
the fourth year and US$5.68 million for the fifth year.
If revenue from lead is
used to cover production cost, then averaging unit silver production cost
adjusted for lead credit is projected to be US$3.41/oz for the TLP mine and
US$2.62/oz for the LM mine. If lead is treated as free credits and only
silver revenue is used to cover the production cost, then the averaging unit
silver production costs for the TLP and LM mines are projected to be
US$7.51/oz and US$4.98/oz, respectively.
Net cash flow generated
from production over the five-year mine plan is expected to be US$26,702,379
for 100% of the TLP mine and US$7,665,749 for 100% of the LM mine.
Payback
Capital expenditures of
US$8,835,447, including mine development and ongoing programs, is budgeted for the TLP-LM project. The payback
period for TLP-LM is approximately one and a half years.
Michael Hibbitts, P.Geo., Silvercorp�s V.P. Operations, is the Company's Qualified
Person on the project under NI 43-101 and has reviewed and given consent to
the press release.
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's common shares
trade on the TSX Exchange under the symbol �SVM�. The Company�s shares are
included in the S&P/TSX Composite Index and S&P/TSX Global Mining
Index.
For
further information: SILVERCORP METALS INC., Rui Feng, Chairman & CEO, Lorne Waldman, Corporate Secretary. Phone: (604) 669-9397, fax:
(604) 669-9387, Email: info@silvercorp.ca, Website:
www.silvercorp.ca
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. Projections of the
mine plan, total production, production costs, and payback are based on
mineral resources which are not mineral reserves and do no 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.
CAUTIONARY
NOTE TO U.S. INVESTORS CONCERNING ESTIMATES OF MEASURED, INDICATED AND
INFERRED RESOURCES
This press releases uses the terms �Measured�, �Indicated� and Inferred�
Resources. U.S. investors are advised that while such terms are recognized
and required by Canadian regulations, the Securities and Exchange Commission
does not recognize them. �Inferred Resources� have a great amount of
uncertainty as to their existence, and great uncertainty as to their economic
and legal feasibility. It cannot be assumed that all or any part of an
inferred resource will ever be upgraded to a higher category. Under Canadian
rules, estimates of Inferred Resources may not form the basis of feasibility
or other economic studies. U.S.
investors are cautioned not to assume
that all or any part of Measured or Indicated Resources will ever be
converted into reserves. U.S. investors are also cautioned not to assume that
all or any part of an Inferred Mineral Resource exists, or is economically or
legally of an Inferred Mineral Resource existence, or is economically or
legally mineable.
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