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Ying Mining District Overview

Introduction

AMC Mining Consultants (Canada) Ltd (AMC) was commissioned by Silvercorp Metals Inc. (Silvercorp) to prepare a Technical Report on the Ying gold-silver-lead-zinc property in Henan Province, China, encompassing the SGX (/HZG), HPG and TLP / LM underground mines.

Latest Technical Report

The previous Technical Report, prepared by AMC, was dated 30 April 2013. The Ying Property is about 240 km west-southwest of Zhengzhou, the capital city of Henan Province, and 145 km southwest of Luoyang, which is the nearest major city. The project areas have good road access and operate year round.

History

Silver-lead-zinc mineralization in the Ying district has been known and intermittently mined for several hundred years. The first systematic geological prospecting and exploration was initiated in 1956 by the Chinese government. Detailed summaries of the district's historical activities from 1956 to 2004, when Silvercorp first acquired interests in the area, are described in previous NI 43-101 Technical Reports. [Add link to Technical Reports Page] In March 2004, Silvercorp acquired its flagship Ying silver-lead-zinc project, and has subsequently acquired three other adjacent projects (the HPG, TLP and LM mines) in 2007, consolidating its hold on the district.

Ownership

Silvercorp, through its wholly owned subsidiary Victor Mining Ltd, is party to a cooperative joint venture agreement dated 12 April 2004 under which it earned a 77.5% interest in Henan Found Mining Co. Ltd (Henan Found), the Chinese company holding (with other assets) the Ying silver, lead and zinc project (the Ying Project), and the silver and lead project in Tieluping (the TLP Project). In addition Silvercorp, through its wholly owned subsidiary Victor Resources Ltd, is party to a cooperative agreement dated 31 March 2006 under which it initially obtained a 60% interest in Henan Huawei Mining Co. Ltd (Henan Huawei), the Chinese company holding the project in Houpinggou (the HPG Project) and the project in Longmeng (the LM Project). Since that time the Silvercorp's interest in Henan Huawei has increased to 80%.

Geology and Exploration

Geologically, the Ying Property occurs in the 300 km-long west-northwest trending Qinling orogenic belt, a major structural belt formed by the collision of two large continental tectonic plates in Paleozoic time. Rocks along the orogenic belt are severely folded and faulted, offering optimal structural conditions for the emplacement of mineral deposits. Several operating silver-lead-zinc mines, including those in the Ying district, occur along this belt. The dominant structures in the region are west-northwest trending folds and faults, the faults comprising numerous thrusts with sets of conjugate shear structures trending either northwest or northeast. These shear zones are associated with all the important mineralization in the district.

Mineralization comprises numerous mesothermal, silver-lead-zinc-rich, quartz-carbonate veins in steeply-dipping fault-fissure zones which cut Precambrian gneiss and greenstone. The veins thin and thicken abruptly along the structures in classic "pinch-and-swell" fashion with widths varying from a few centimetres up to a few metres. The fault-fissure zones extend for hundreds to a few thousand metres along strike. To date, significant mineralization has been defined or developed in at least 167 discrete vein structures, and many other smaller veins have been found but not, as yet, well explored.

The vein systems of the various mine areas in the district are generally similar in mineralogy, with slight differences between some of the separate mine areas and between the different vein systems within each area.

Between 2004 and 2011, Silvercorp drilled 1,744 underground holes and 265 surface holes, for a total of approximately 591,000 m. An additional 1,013 underground holes and 24 surface holes for a total of approximately 267,000 m were drilled in 2012 and the first half of 2013.

Other than drilling, the projects have been explored primarily from underground workings. The workings follow vein structures along strike, on levels spaced approximately 40 m apart. Chip samples across the structures are collected at 5 m intervals. During 2012-2013, Silvercorp undertook 58 km of tunneling and collected approximately 19,000 channel/chip samples.

Mineral Resources and metal content for silver, lead, zinc and gold as of June 2013 (Table 14.1)

Ying Mines Mineral Reserve estimates (Table 15.4)

Mineral Processing

Silvercorp runs two processing plants, Plants 1 and 2, at the Ying Mine with a total current design capacity of 2,600 tpd, but the actual capacity can reach 3,000 – 3,350 tpd. The two plants are situated within 2 km of each other. Plant 1 (Xiayu Plant, 600 tpd) has been in operation since March, 2007. Plant 2 (Zhuangtou Plant) has been in production since December 2009, with an expansion from 1,000 tpd to 2,000 tpd completed in October 2011. Up until now plant capacity has been under-utilized (especially Plant 2) relative to design and ultimate capacity. However the LOM plan calls for 3,000 tpd during the period 2016-2022 as LM-W becomes a more significant contributor to ore supply.

SGX/HPG ores also contain high grade, large-size galena lumps with characteristic specular silver-grey colour. These are hand-sorted at the mine sites, crushed, and then shipped by dedicated trucks to Plant 1. The lumps are milled in a dedicated facility, and then sold directly or mixed with flotation lead concentrate for sale.

Regional Geology

Please see our latest NI 43-101 Technical Reports for Ying Mining District by clicking here or at SEDAR (www.sedar.com).

 

Last updated Sept 29, 2014

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