Trading Symbol
TSX: SVM
NYSE
American:
SVM
VANCOUVER, BC, Aug. 26, 2021 /PRNewswire/
- Silvercorp Metals Inc. ("Silvercorp" or the
"Company") (TSX: SVM) (NYSE American: SVM) is pleased to
report the results of an updated National Instrument 43-101 ("NI
43-101") Technical Report entitled "NI 43-101 Technical Report
Update on the Gaocheng Ag-Zn-Pb Project in Guangdong Province, People's Republic of China" with an effective
date of March 31, 2021 (Mineral
Resources and Mineral Reserves effective December 31, 2020), prepared by AMC Mining
Consultants (Canada) Ltd. ("AMC")
(the "GC NI 43-101 Technical Report").
Five of the six authors of the GC NI 43-101 Technical Report
qualify as independent Qualified Persons, two of whom visited the
GC Mine in January 2018 and examined
all aspects of the project, including drill core, underground
workings, processing plant, and surface infrastructure. The
non-independent author, who is a Silvercorp employee, has visited
the site on numerous occasions, with the last two visits from 25 to
30 October 2019 and from 13 to
28 May 2021. The GC NI 43-101
Technical Report will be made available for review on the Company's
SEDAR profile and website at www.silvercorp.ca in due course.
Highlights of the GC NI 43-101 Technical Report
From the start of operations at the GC Mine in 2014 through to
December 31, 2020, 1,853,662 tonnes
have been mined at average head grades of 94 grams per tonne
("g/t") silver ("Ag"), 1.6% lead ("Pb"), and 2.9% zinc ("Zn").
Despite this mine production depletion, there has been an 8%
increase in tonnes of combined Proven and Probable Reserves (39%
increase in Proven Reserves and 21% decrease in Probable Reserves)
compared to the Mineral Reserve estimate in the previous Technical
Report on the GC Mine with an effective date of June 30, 2019 (the "2019 Technical Report").
Based on only Proven and Probable Reserves, the GC Mine has a
projected life of mine ("LOM") of 13 years through to 2034, at an
average annual production rate of approximately 310,000 tonnes, and
with average silver equivalent ("AgEq")[1] grades of approximately
309 g/t. The GC Mine has the potential to extend the LOM beyond
2034, via the conversion of existing Mineral Resources to Mineral
Reserves, and further exploration and development.
Compared to the Mineral Resources estimate in the 2019 Technical
Report, the Measured tonnes have increased by 57% due to the
discovery of new veins, new vein interpretations and the conversion
of Indicated tonnes (which decreased by 17%) to the Measured
Resource classification. Inferred tonnes have also increased by
17%.
_____________________________
|
1 The
equivalency formula is AgEq = Ag g/t + 50.46*Pb% + 43.53*Zn% using
prices of US$18.20/oz Ag, US$0.94/lb Pb and US$1.08/lb Zn,
estimated recoveries of 82.6% Ag, 89.5% Pb, and 87.3% Zn, and
respective payables of 65.5%, 86.2% and 66.3%.
|
The results of the underground drilling program at the GC Mine
show that vein structures are still open at depth.
2021 Mineral Reserve and Mineral Resource Update
Silvercorp completed its first phase of diamond drilling at the
GC Mine in 2008 and has continued through to the present. The 2019
Technical Report Mineral Resource and Mineral Reserve estimates on
the GC Mine were as of December 31,
2018. All Silvercorp drilling has been completed with
NQ-sized core. Drillhole collars were surveyed using a total
station and downhole surveys were completed every 50 m downhole. Core recoveries varied between
35.66% and 100%, averaging 99.36%.
Mineral Reserves
The Mineral Reserve estimates for the GC Mine were prepared by
Silvercorp under the guidance of an independent Qualified Person
("QP"), Mr. H. A. Smith, P.Eng., of AMC, who takes QP
responsibility for those estimates. The assumption has been made
that current stoping practices will continue to be employed at the
GC Mine, namely predominantly shrinkage stoping (69% of projected
LOM), combined with some cut and fill resuing (31% of projected
LOM), using hand-held drills and hand-mucking within stopes, and
loading to mine cars by rocker-shovel or by hand. Minimum mining
widths of 1.0 m for shrinkage and 0.5 m for resuing are
assumed.
Average dilution has been estimated at 19.8% for shrinkage and
12.4% for resuing, with an average of 17.4%. Assumed mining
recovery factors are 92% for shrinkage stopes and 95% for resuing
stopes.
The GC NI 43-101 Technical Report defines Mineral Reserves of
4.131 million tonnes in the combined Proven and Probable
categories, grading 94 g/t Ag, 1.5% Pb, and 3.2% Zn, containing
approximately 12.5 million ounces of silver, 135 million pounds of
lead, and 293 million pounds of zinc. Mineral Reserve tonnes
are noted to be approximately 41% of Mineral Resource (Measured
plus Indicated) tonnes. Silver, lead, and zinc Mineral Reserve
grades are 115%, 124%, and 115%, respectively, of the corresponding
Measured plus Indicated Mineral Resource grades. Metal content
conversions for silver, lead, and zinc from Measured plus Indicated
Mineral Resources to Proven plus Probable Mineral Reserves are 47%,
51%, and 47%, respectively. Mineral Reserves are detailed in Table
1 below.
Table 1 GC Mine - Mineral Reserves
Classification
|
Tonnes
(Mt)
|
Ag
(g/t)
|
Pb
(%)
|
Zn
(%)
|
Contained
metal
|
Ag
(koz)
|
Pb
(Mlbs)
|
Zn
(Mlbs)
|
Proven
|
2.587
|
93
|
1.5
|
3.3
|
7,743
|
84
|
189
|
Probable
|
1.544
|
95
|
1.5
|
3.0
|
4,740
|
51
|
103
|
Proven and
Probable
|
4.131
|
94
|
1.5
|
3.2
|
12,483
|
135
|
293
|
Notes:
|
1.
|
Full breakeven
cut-off grades: Shrinkage = 215 g/t AgEq; Resuing = 275 g/t
AgEq.
|
2.
|
Marginal material
cut-off grade: Shrinkage = 185 g/t AgEq; Resuing = 250 g/t
AgEq.
|
3.
|
Dilution (zero grade)
assumed as a minimum of 0.1 m on each wall of a shrinkage stope and
0.05 m on each wall of a resuing stope.
|
4.
|
Mining recovery
factors assumed as 92% for shrinkage and 95% for
resuing.
|
5.
|
Metal prices: Silver
US$18.20/troy oz, lead US$0.94/lb, zinc US$1.08/lb, with respective
payables of 65.5%, 86.2%, and 66.3%.
|
6.
|
Processing recovery
factors: Ag – 82.6%, Pb – 89.5%, Zn – 87.3%.
|
7.
|
Effective date 31
December 2020.
|
8.
|
Exchange rate assumed
is RMB6.80: US$1.00.
|
9.
|
Rounding of some
figures may lead to minor discrepancies in totals.
|
Mineral Reserve cut-off grade and key estimation parameters are
shown in Table 2 below.
Table 2 Mineral Reserve Cut-off Grades and Key
Estimation Parameters
Item
|
GC
Mine
|
Foreign exchange
rate (RMB:US$)
|
6.8
|
|
Shrinkage
|
Resuing
|
Operating
costs
|
Mining cost (includes
development & exploration) (US$/t)
|
25.94
|
45.05
|
Milling cost
(US$/t)
|
13.58
|
13.58
|
G&A and product
selling cost (US$/t)
|
9.84
|
9.84
|
Sustaining &
non-sustaining capital (US$/t)
|
16.72
|
16.72
|
Mineral Resources
tax, etc. (US$/t)
|
1.98
|
2.56
|
Total operating
costs (US$/t)
|
68.07
|
87.74
|
Mining recovery
(%)
|
92
|
95
|
Mill
recoveries
|
Ag (%)
|
82.6
|
82.6
|
Pb (%)
|
89.5
|
89.5
|
Zn (%)
|
87.3
|
87.3
|
Breakeven COG
(AgEq g/t)
|
215
|
275
|
Note:
|
Metal price
assumptions: Ag US$18.20/oz; Pb US$0.94/lb; Zn US$1.08/lb;
respective payables of 65.5%, 86.2%, and 66.3%.
|
Mineral Resources:
The Mineral Resource estimates for the GC Mine were prepared by
Mr. Shoupu Xiang, Resource Geologist of Silvercorp. Ms. Dinara
Nussipakynova, P.Geo., of AMC, has reviewed the methodologies and
data used to prepare the Mineral Resource estimates and, after some
adjustment to the Mineral Resource classification and capping, is
satisfied that they comply with reasonable industry practice.
Ms. Nussipakynova takes responsibility for these
estimates.
Resources were estimated using a block modelling approach, with
MicromineTM software. Interpolation was carried out
using inverse distance squared (ID2) for all the veins.
Estimates were made for a total of 156 mineralized vein structures
for the GC Mine.
The Mineral Resources are reported above a cut-off of 105 g/t
AgEq. The cut-off value was based on estimated costs for mining,
maintenance/admin, internal ore transport and processing. The
cut-off value calculation was generated by AMC with input from
Silvercorp. The equivalency formula is: AgEq=Ag
g/t+50.46*Pb%+43.53*Zn%. The multiplication factors for Pb and Zn
were derived from equations based on metal prices, recoveries, and
payable factors.
Mineral Resources at December 31,
2020 total 10.0 million tonnes (inclusive of Mineral
Reserves) in the combined Measured and Indicated categories,
grading 82 g/t Ag, 1.2% Pb, and 2.8% Zn, containing approximately
26.4 million ounces of silver, 265 million pounds of lead, and
619 million pounds of zinc, and are detailed in Table 3 below.
Table 3 GC Mine – Measured & Indicated
Resources (Inclusive of Mineral Reserves), and Inferred
Mineral Resources
Classification
|
Tonnes
(Mt)
|
Ag
(g/t)
|
Pb
(%)
|
Zn
(%)
|
Contained
metal
|
Ag
(koz)
|
Pb
(Mlbs)
|
Zn
(Mlbs)
|
Measured
|
5.286
|
88
|
1.3
|
3.1
|
14,906
|
154
|
360
|
Indicated
|
4.747
|
75
|
1.1
|
2.5
|
11,457
|
111
|
259
|
Measured &
Indicated
|
10.033
|
82
|
1.2
|
2.8
|
26,363
|
265
|
619
|
Inferred
|
8.441
|
87
|
1.0
|
2.4
|
23,562
|
195
|
442
|
Notes:
|
1.
|
Canadian Institute of
Mining, Metallurgy and Petroleum Standards (2014) ("CIM Definition
Standards") were used for reporting the Mineral
Resources.
|
2.
|
Mineral Resources are
reported at a cut-off grade of 105 g/t AgEg.
|
3.
|
The equivalency
formula is Ag g/t+50.46*Pb%+43.53*Zn% using prices of US$18.20/oz
Ag, US$0.94/lb Pb, and US$1.08/lb Zn and estimated recoveries of
82.6% Ag, 89.5% Pb, and 87.3% Zn.
|
4.
|
Sample results up to
31 December 2020.
|
5.
|
Mineral Resources
have been depleted to account for mining to 31 December
2020.
|
6.
|
Effective date 31
December 2020.
|
7.
|
Veins factored to a
minimum extraction width of 0.4 m.
|
8.
|
Mineral Resources are
inclusive of Mineral Reserves.
|
9.
|
Mineral Resources
that are not Mineral Reserves do not have demonstrated economic
viability. An Inferred Mineral Resource is that part of a
Mineral Resource for which quantity and grade or quality are
estimated on the basis of limited geological evidence and sampling
and must not be converted to a Mineral Reserve. It is reasonably
expected that the majority of Inferred Mineral Resources could be
upgraded to Indicated Mineral Resources with continued
exploration.
|
10.
|
The numbers may not
compute exactly due to rounding.
|
11.
|
Source: Silvercorp
Metals Inc., reproduced as a check by AMC.
|
Qualified Persons and Technical Information
D. Nussipakynova, P.Geo., H. A. Smith, P.Eng., A. Riles, MAIG.,
A. A. Ross, P.Geo., and S. Robinson, P.Geo., MAIG. of AMC are
independent Qualified Persons as defined by NI 43-101. G. Ma,
P.Geo. of Silvercorp is a Qualified Person as defined by NI 43-101.
All of the QPs reviewed and consented to this news release and
believe it fairly and accurately represents the information in the
Technical Report that supports the disclosure.
The Mineral Reserve and Mineral Resource estimates have been
estimated and compiled in accordance with definitions and
guidelines set out in the CIM Definition Standards (2014).
About Silvercorp
Silvercorp is a profitable Canadian mining company producing
silver, lead and zinc metals in concentrates from mines in
China. The Company's goal is to
continuously create healthy returns to shareholders through
efficient management, organic growth and the acquisition of
profitable projects. Silvercorp balances profitability, social and
environmental relationships, employees' wellbeing, and sustainable
development. For more information, please visit our website at
www.silvercorp.ca
CAUTIONARY DISCLAIMER - FORWARD-LOOKING
STATEMENTS
Certain of the statements and information in this news
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 (collectively,
"forward-looking statements"). 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. Forward-looking statements 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 and the GC Mine; 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 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, 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; 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; 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. Forward-looking
statements 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 due to a variety of risks,
uncertainties and other factors, including, without limitation,
those referred to in the Company's Annual Information Form 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.
The Company's forward-looking statements are based on the
assumptions, beliefs, expectations and opinions of management as of
the date of this news release, and other than as required by
applicable securities laws, the Company does not assume any
obligation to update forward-looking statements if circumstances or
management's assumptions, beliefs, expectations or opinions should
change, or changes in any other events affecting such statements.
For the reasons set forth above, investors should not place undue
reliance on forward-looking statements.
CAUTIONARY NOTE TO US INVESTORS
The disclosure in this news release and referred to herein
was prepared in accordance with NI 43-101 which differs
significantly from the requirements of the U.S. Securities and
Exchange Commission (the "SEC"). The terms "proven mineral
reserve", "probable mineral reserve", "mineral reserves", "mineral
resources", "measured mineral resources", "indicated mineral
resources" and "inferred mineral resources" used in this news
release are in reference to the mining terms defined in the CIM
Definition Standards, which definitions have been adopted by NI
43-101. Accordingly, information contained in this news
release providing descriptions of our mineral deposits in
accordance with NI 43-101 may not be comparable to similar
information made public by other U.S. companies subject to
the United States federal
securities laws and the rules and regulations thereunder.
Investors are cautioned not to assume that any part or all of
mineral resources will ever be converted into reserves. Pursuant to
CIM Definition Standards, "Inferred mineral resources" are that
part of a mineral resource for which quantity and grade or quality
are estimated on the basis of limited geological evidence and
sampling. Such geological evidence is sufficient to imply but
not verify geological and grade or quality continuity. An
inferred mineral resource has a lower level of confidence than that
applying to an indicated mineral resource and must not be converted
to a mineral reserve. However, it is reasonably expected that the
majority of inferred mineral resources could be upgraded to
indicated mineral resources with continued exploration. Under
Canadian rules, estimates of inferred mineral resources may not
form the basis of feasibility or pre-feasibility studies, except in
rare cases. Investors are cautioned not to assume that all or
any part of an inferred mineral resource is economically or legally
mineable. Disclosure of "contained ounces" in a resource is
permitted disclosure under Canadian regulations; however, the SEC
normally only permits issuers to report mineralization that does
not constitute "reserves" by SEC standards as in place tonnage and
grade without reference to unit measures.
Canadian standards, including the CIM Definition Standards
and NI 43-101, differ significantly from standards in the SEC
Industry Guide 7. Effective February
25, 2019, the SEC adopted new mining disclosure rules under
subpart 1300 of Regulation S-K of the United States Securities Act
of 1933, as amended (the "SEC Modernization Rules"), with
compliance required for the first fiscal year beginning on or after
January 1, 2021. The SEC Modernization Rules replace the
historical property disclosure requirements included in SEC
Industry Guide 7. As a result of the adoption of the SEC
Modernization Rules, the SEC now recognizes estimates of "Measured
Mineral Resources", "Indicated Mineral Resources" and "Inferred
Mineral Resources". In addition, the SEC has amended its
definitions of "Proven Mineral Reserves" and "Probable Mineral
Reserves" to be substantially similar to corresponding definitions
under the CIM Definition Standards. During the period leading
up to the compliance date of the SEC Modernization Rules,
information regarding mineral resources or reserves contained or
referenced in this news release may not be comparable to similar
information made public by companies that report according to U.S.
standards. While the SEC Modernization Rules are purported to
be "substantially similar" to the CIM Definition Standards, readers
are cautioned that there are differences between the SEC
Modernization Rules and the CIM Definitions Standards.
Accordingly, there is no assurance any mineral reserves or mineral
resources that the Company may report as "proven mineral reserve",
"probable mineral reserve", "mineral reserves", "mineral
resources", "measured mineral resources", "indicated mineral
resources" and "inferred mineral resources" under NI 43-101 would
be the same had the Company prepared the reserve or resource
estimates under the standards adopted under the SEC Modernization
Rules.
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SOURCE Silvercorp Metals Inc