VANCOUVER, British Columbia – January 12, 2022 – Silvercorp Metals Inc. (“Silvercorp” or the “Company”) (TSX: SVM) (NYSE American: SVM) is pleased to report additional high-grade intercepts from its 2021 exploration program at the HPG mine. Extensive exploration drilling and tunneling are ongoing at the HPG mine and all other mines in the Ying Mining District, Henan Province, China.
From June 1 to December 31, 2021, 24,369 metres (“m”) from a total of 153 diamond drill holes, including 89 underground holes and 64 surface holes, were completed at the HPG mine. Assay results for 134 holes have been received, with 82 holes intercepting mineralization. Currently, there are nine rigs drilling at the HPG mine.
The strategy of the drilling program is threefold: 1) drill above or beneath the stopes that were previously mined but stopped due to more variation in grades, thickness, and attitudes of the vein structures than previously modeled to easily obtain ore; 2) drill for gold-silver -lead-zinc veins in the resource area at higher elevations near the surface and southwest side to expand the resources; and 3) drill for a rhyolitic breccia dyke that is prominently exposed in the middle of the mining area and mineralized with gold-silver-lead-zinc.
Drilling Above or Beneath Previously Mined Stopes
Most holes drilled during this period targeted blocks containing known ore veins in production areas that were previously missed due to limited drilling or tunneling, changes in the strikes and dips, and/or pinch-swelling of the pay-zones within the veins. The high-grade intercepts are mainly associated with the southwest-striking H5 series, H15 series, H16 series, H17 series, H11, and H14 veins. Since access tunnels are already in place, any high-grade mineralization discovered can quickly be converted to reserves and mined.
Highlights of the high-grade gold-silver-lead-zinc intercepts near the surface or previously mined stopes:
- Underground hole ZK2542 intersected a 1.91 m interval (1.64 m true width) of vein H16 grading 24.66 g/t gold (“Au”), 56 g/t silver (“Ag”), 3.28% lead (“Pb”), 2.12% zinc (“Zn”), and 0.11% copper (“Cu”) from 29.11 m depth, at an elevation of 527 m;
- Underground hole ZK2314 intersected a 0.75 m interval (0.48 m true width) of vein H15 grading 21.00 g/t Au, 54 g/t Ag, 0.45% Pb, 0.09% Zn, and 0.24% Cu from 132.91 m depth, at an elevation of 444 m; and
- Underground hole ZK24N04 intersected a 2.45 m interval (2.10 m true width) of vein H15 grading 0.65 g/t Au, 155 g/t Ag, 14.93% Pb, 0.03% Zn, and 0.42% Cu from 160.36 m depth, at an elevation of 549 m.
Near Surface Mineralization in Gold-Silver-Lead-Zinc Veins
Nineteen diamond drill holes were drilled from surface, with additional underground diamond drilling employed to test for near surface mineralization above 520 m within the HPG resource area. The drilling intersected gold-silver-lead-zinc veins including the H9 series, H11 series, H14 series, H15 series, H16 series, H17 series, and H10_1. The purpose of this drilling was to extend the resources to higher elevations within the current resource area.
Highlights of the high-grade gold-silver-lead-zinc intercepts near the surface or previously mined stopes:
- Surface hole ZK2419 intersected a 2.20 m interval (1.90 m true width) of vein H17 grading 22.99 g/t Au, 35 g/t Ag, 0.49% Pb, 0.07% Zn, and 0.02% Cu from 78.57 m depth, at an elevation of 817 m; and
- Surface hole ZK1218 intersected a 1.36 m interval (1.22 m true width) of vein H17 grading 10.54 g/t Au, 17 g/t Ag, 0.60% Pb, 0.02% Zn, and 0.05% Cu from 89.69 m depth, at an elevation of 783 m.
Drilling High-Grade Gold-Silver-Lead-Zinc Veins at the Southwest Side of the Resource Area
Surface and underground diamond drilling at the southwest side of the resource area intersected high-grade gold-silver-lead-zinc veins of the H20W, H12_1, H39, H41, and H40 series, at an elevation between 435 m and 655 m. These vein structures strike north to north-northeast, and have vertical to sub-vertical dips to the east. Among them, H41W is a newly discovered north-northeast striking high-grade vein that was intersected during this period.
Highlights of the high-grade gold-silver-lead-zinc intercepts at the southwest side of the resource area:
- Underground hole ZK11206 intersected a 1.33 m interval (1.10 m true width) of vein H41W grading 2.86 g/t Au, 1,469 g/t Ag, 3.69% Pb, 2.33% Zn, and 0.13% Cu from 66.90 m depth, at an elevation of 613 m;
- Underground hole ZK11207 intersected a 0.50 m interval (0.28 m true width) of vein H41W grading 0.18 g/t Au, 2,642 g/t Ag, 0.63% Pb, 0.21% Zn, and 0.09% Cu from 62.50 m depth, at an elevation of 613 m;
- Underground hole ZK11604 intersected a 1.67 m interval (1.12 m true width) of vein H40 grading 7.31 g/t Au, 100 g/t Ag, 1.78% Pb, 0.19% Zn, and 0.03% Cu from 266.55 m depth, at an elevation of 532 m; and
- Surface hole ZK11406 intersected a 0.52 m interval (0.31 m true width) of vein H20W grading 14.60 g/t Au, 15 g/t Ag, 0.07% Pb, 0.09% Zn, and 0.02% Cu from 199.41 m depth, at an elevation of 527 m.
Drilling for a Rhyolitic Breccia Dyke
The breccia dyke extends along a northwest trend for approximately two kilometres (“km”), has a thickness from 25 to 200 m, and dips steeply to the northeast. Hole ZK1315 from this drill program intercepted a significant width of mineralization which is associated with siderite-ankerite-pyrite, and minor galena, sphalerite, and chalcopyrite in the matrix of the breccia. It is possible all the gold-silver -lead-zinc veins mined at the HPG mine have cut the breccia dyke.
Hole ZK1315 intersected an 18.41 m interval grading 1.42 g/t Au, 122 g/t Ag, 0.97% Pb, 0.56% Zn, and 0.14% Cu in the breccia (Table 1). An earlier drill hole ZK1511 from nearby also intercepted a 31.8 m interval grading 1.14 g/t Au, 52 g/t Ag, 0.3% Pb, and 0.25% Zn.
This discovery of broad mineralization in the breccia dyke has been confirmed by a cross-cut tunnel PD2-570-15WCM, which cut a 20.7 m interval grading 1.06 g/t Au, 122 g/t Ag, 1.33% Pb, 1.48% Zn, and 0.14% Cu at an elevation of 570 m (Table 4).
Tunneling Programs at the HPG Mine
A total of 1,436 m of exploration tunnels were developed at the HPG mine during this period. The exploration tunneling, which comprised of drifting, cross-cutting and raising, was driven along and across major mineralized vein structures to upgrade the drill-defined mineral resources, and to test for new parallel and splay structures (Tables 2 and 3).
Drill cores are NQ size. Drill core samples, limited by apparent mineralization contacts or shear/alteration contacts, were split into halves by saw cutting. The half cores are stored in the Company’s core shacks for future reference and checks, and the other half core samples are shipped in securely sealed bags to the Chengde Huakan 514 Geology and Minerals Test and Research Institute in Chengde, Hebei Province, China, 226 km northeast of Beijing, the Zhengzhou Nonferrous Exploration Institute Lab in Zhengzhou, Henan Province, China, and SGS in Tianjin, China. All three labs are ISO9000 certified analytical labs. For analysis, the sample is dried and crushed to minus 1 mm and then split into a 200-300 g subsample which is further pulverized to minus 200 mesh. Two subsamples are prepared from the pulverized sample. One is digested with aqua regia for gold analysis with atomic absorption spectroscopy (“AAS”), and the other is digested with two-acids for analysis of silver, lead, zinc, and copper with AAS.
Channel samples are collected along sample lines perpendicular to the mineralized vein structure in exploration tunnels. Spacing between sampling lines is typically 5 m along strike. Both the mineralized vein and the altered wall rocks are cut by continuous chisel chipping. Sample length ranges from 0.2 m to more than 1 m, depending on the width of the mineralized vein and the mineralization type. Channel samples are prepared and assayed with AAS at Silvercorp’s mine laboratory (“Ying Lab”) located at the mill complex in Luoning County, Henan Province, China. The Ying lab is officially accredited by the Quality and Technology Monitoring Bureau of Henan Province and is qualified to provide analytical services. The channel samples are dried, crushed and pulverized. A 200 g sample of minus 160 mesh is prepared for assay. A duplicate sample of minus 1 mm is made and kept in the laboratory archives. Gold is analysed by fire assay with AAS finish, while silver, lead, zinc, and copper are assayed by two-acid digestion with AAS finish.
A routine quality assurance/quality control (“QA/QC”) procedure is adopted to monitor the analytical quality at each lab. Certified reference materials (CRMs), pulp duplicates and blanks are inserted into each batch of lab samples. QA/QC data at the lab are attached to the assay certificates for each batch of samples.
The Company maintains its own comprehensive QA/QC program to ensure best practices in sample preparation and analysis of the exploration samples. Project geologists regularly insert CRMs, field duplicates and blanks to each batch of 30 core samples to monitor the sample preparation and analysis procedures at the labs. The analytical quality of the labs is further evaluated with external checks by sending approximately 3-5% of the pulp samples to higher level labs to check for lab bias. Data from both the Company’s and the labs’ QA/QC programs are reviewed on a timely basis by project geologists.
Guoliang Ma, P. Geo., Manager of Exploration and Resource of the Company, is the Qualified Person for Silvercorp under NI 43-101 and has reviewed and given consent to the technical information contained in this news release.
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.
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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, social and economic impacts of COVID-19; 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 licenses; 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; legislative and regulatory initiatives addressing global climate change or other environmental concerns; 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, 2021 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.
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” and “mineral reserves” used in this news release are in reference to the mining terms defined in the Canadian Institute of Mining, Metallurgy and Petroleum Standards (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 reserves”, “probable mineral reserves”, “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.