AMC Mining Consultants (Canada) Ltd. (AMC) was commissioned by Silvercorp Metals Inc. (Silvercorp) to prepare a Technical Report on the Ying silver-lead-zinc property in Henan Province, China, encompassing the SGX, HZG,, HPG, TLP, LME and LMW underground mines.
Latest Technical Report filed February 24, 2017
AMC had previously prepared Technical Reports on the Ying property in 2012 (filed 15 June 2012, effective date 1 May 2012), and in 2013 (minor update to 2012 report, filed 30 April 2013, effective date 1 May 2012). Prior to the current Technical Report, the most recent was prepared by AMC dated 29 July 2014 with an effective date of 31 December 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 nearest small city to the project area is Luoning, about 56 km by paved roads from Silvercorp’s Ying mill site. The project areas have good road access and operate year round. The area has a continental sub-tropical climate with four distinct seasons.
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 (see Section 27 – References). Silvercorp acquired an interest in the SGX Mine Project in 2004. Subsequently, Silvercorp acquired the HZG, HPG, TLP and LM mines, all of which were previously held and operated by private Chinese companies.
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 224 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.
From 1 July 2013 to 30 June 2016, Silvercorp drilled 855 underground holes and 41 surface holes, for a total of approximately 225,000 m. Most drill core (core) is NQ-sized. Core recoveries are influenced by lithology and average 98-99%. Core is logged, photographed and sampled in the surface core shack. Samples are prepared by cutting the core in half with a diamond saw. One half of the core is marked with sample number and sample boundary and then returned to the core box for archival storage. The other half is placed in a labelled cotton cloth bag with sample number marked on the bag. The bagged sample is then shipped to the laboratory for assaying
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 spacing. From 1 July 2013 to 30 June 2016, Silvercorp undertook 128 km of tunnelling, and collected approximately 44,000 channel / chip samples.
Mineral Resources and metal content for the property as of 30 June 2016 (See Table 14.1 for further details)
* See actual Technical Report for notes and assumptions
Mineral Reserve estimates, Ying Property, 30 June 2016 (See Table 15.4 for further details)
* See actual Technical Report for notes and assumptions
Silvercorp runs two processing plants, Plants 1 and 2, at the Ying Mine with a total current design capacity of 2,600 tpd. The two plants are situated within 2 km of each other. Both were designed based on the lab tests completed by HNMRI in 2005. 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. From January 2012, the total design processing capacity is about 2,600 tpd, but the actual capacity can reach 3,000 – 3,200 tpd. Up until now plant capacity has been under-utilized (especially Plant 2) relative to design and ultimate capacity. The LOM plan shows an increase in planned production from 650 kt in 2017 to 749 kt in 2025, then a gradual decrease to less than 370 kt in 2036.
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.
Please see our latest NI 43-101 Technical Reports for Ying Mining District by clicking here or at SEDAR (www.sedar.com).
Last updated March 3, 2017