News release
Silvercorp M Metals Inc.
希尔威金属矿业有限公司 Suite 1750 – 1 1066 West Hastings St. Vancouver, BC, Canada V6E 3X1 Tel: 604‐669‐ ‐9397 Fax: 604‐669 9‐9387
NEWS S RELEASE
Tradin ng Symbol: TS SX: SVM NY YSE American n: SVM
SILVERCOR RP REPORTS INCREASED R RESERVES AN ND RESOURCE ES AT THE GC C MINE
VANC
COUVER, British Columbia – September r 3, 2019 – Si ilvercorp Met tals Inc. (“Silv vercorp” or th he “Company”) (TSX/N NYSE America an: SVM) is p pleased to rep port the resu ults of an upd dated National Instrument 43‐101 Technical Rep 2019 (Mineral Resources an port with an e effective date of June 30, 2 nd Miner ral Reserves effective December 31, 2018), prepared b by AMC Minin ng Consultant ts (Canada) Ltd. (“AMC C”) on the Gao ocheng silver‐ ‐zinc‐lead prop perty (the “GC C Mine”) in Gu uangdong Pro ovince, People e’s Repub blic of China (t the “Gaocheng NI 43‐101 Te echnical Repo ort”).
The fo our authors o of the Gaoche eng NI 43‐101 Technical Re eport all quali ify as indepen ndent Qualifie ed Persons. Two of the authors visited the GC M Mine in Januar ry 2018. AMC examined all aspects of th he projec ct, including d drill core, unde erground wor rkings, processing plant and d surface infra astructure. Th he Gaoch heng NI 43‐101 Technical Re eport will be m made availabl le for review o on the SEDAR system and o on the Co ompany’s web bsite at www.s silvercorp.ca in due course.
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Highli ights of the Ga aocheng NI 43 3‐101 Technic cal Report
From the start of operations at t the GC Min ne in 2014 through to Dec cember 31, 2018, 1,251,00 tonne es have been m mined at avera age head grad des of 96 g/t silver, 1.5% lea ad and 2.7% zi inc.
Despit te mine produ uction depleti ion, there has s been a 7% in ncrease in ton nnes of Proven n and Probable stimate in the previous Technical Report (effective dat Reserv ves compared d to the Miner ral Reserve es te of rep port June 30, 2 2018).
Based d on Proven an nd Probable R Reserves only, , the GC Mine e has a projec cted life of min ne (LOM) of 1 years through to 20 031, at an ave erage annual production ra ate of approxi imately 300,000 tonnes, an nd average silver equivalent grades1 of approximately 33 with a 34 g/t for the first six years s and then 27 g/t for the remainder of the mine e life. The GC Mine also has s the potentia al to extend th he LOM beyon nd 2031, via conversio on of existing Mineral Resou urces to Mine eral Reserves, and further e exploration an nd develo opment.
Measu ured and Indicated Mineral Resource to onnes increase ed by 42%, wh hich is due to
- an increase in
the number of veins and conve ersion of Inferred material l to a higher classification level. Inferre ed tonne es have decrea ased by 3%.
esults of the underground drilling progr The re ram at the GC C Mine show that vein stru uctures are st till open at depth.
1The eq quivalency formula is Ag g/t + 46.1*Pb% + 42.8*Zn n% using prices of $18/oz Ag, $1.0 00/lb Pb and $1.2 25/lb Zn, estimate ed recover ries of 77% Ag, 88% % Pb, and 84% Zn, and respective pa ayables of 85%, 90 0% and 70%.
2018 Mineral Reserve and Mineral Resource Update
Silvercorp completed its first phase of diamond drilling at the GC Mine in 2008. Systematic drilling commenced on the property in 2011 and continued through to 2018. The previous independent Mineral Resource and Mineral Reserve estimates on the property were at December 31, 2017 (Technical Report effective date June 30, 2018). All Silvercorp drilling was completed as NQ‐sized core. Drillhole collars were surveyed using a total station and down hole surveys were completed every 50 m downhole. Core recoveries varied between 42% and 100%, averaging 97%.
Mineral Reserves
The Mineral Reserve estimates for the GC Mine were prepared by Silvercorp under the guidance of an independent Qualified Person, 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 (73% of projected LOM) but also with some cut and fill resuing (27% 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 beyond planned mining widths has been estimated at between 13% and 14%, while assumed mining recovery factors are 92% for shrinkage stopes and 95% for resuing stopes.
The Gaocheng NI 43‐101 Technical Report defines Mineral Reserves of 3.82 million tonnes in the Proven and Probable categories, grading 95 g/t Ag, 1.5% Pb, and 3.2% Zn, containing 11.7 million ounces of silver, 125 million pounds of lead, and 271 million pounds of zinc. Mineral Reserve tonnes are noted to be 42% of Mineral Resource (Measured plus Indicated) tonnes. Silver, lead, and zinc Mineral Reserve grades are 113%, 125% and 114%, 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 48%, 53% and 48%, respectively. Mineral Reserves are detailed in Table 1 below.
Table 1 GC Mine ‐ Mineral Reserves
| Reserve classification | Tonnes (kt) | Ag (g/t) | Pb (%) | Zn (%) | Contained metal | ||
| Ag (koz) | Pb (Mlbs) | Zn (Mlbs) | |||||
| Proven Probable Proven and Probable | 1,865 1,955 3,820 | 94 96 95 | 1.6 1.4 1.5 | 3.5 3.0 3.2 | 5,611 6,064 11,675 | 65 60 125 | 142 129 271 |
Notes to Mineral Reserve Statement:
Full breakeven cut‐off grades: Shrinkage = 200 g/t AgEq: Resuing = 245 g/t AgEq.
Marginal material cut‐off grade: Shrinkage = 160 g/t AgEq; Resuing = 205 g/t AgEq.
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. Mining recovery factors assumed as 95% for resuing and 92% for shrinkage.
Metal prices: Silver US$18/troy oz, lead US$1.00/lb, zinc US$1.25/lb, with respective payables of 85%, 90% and 70%.
Processing recovery factors: Ag – 77%, Pb ‐ 88%, Zn – 84%.
Effective date December 31, 2018.
Exchange rate assumed is RMB 6.50: US$1.00.
Rounding of some figures may lead to minor discrepancies in totals.
Mineral Reserve cut‐off grade and key estimation parameters are shown in Table 2 below.
Table 2 Mineral Reserve Cut‐off Grades and Key Estimation Parameters
| Item | GC Mine | |
|---|---|---|
| Foreign exchange rate (RMB:US$) | 6.5 Shrinkage | 6.5 Resuing |
| Operating costs | ||
| Mining cost (includes development & exploration) ($/t) Milling cost ($/t) G&A and product selling cost ($/t) Sustaining & non‐sustaining capital ($/t) Mineral Resources tax, etc. ($/t) | 35.39 15.06 6.82 6.33 6.90 | 53.29 15.06 6.82 6.33 6.90 |
| Total operating costs (US$/t) | 70.50 | 88.40 |
| Mining recovery (%) | 92 | 95 |
| Mill recoveries | ||
| Ag (%) Pb (%) Zn (%) Breakeven COG (AgEq g/t) | 77 88 84 200 | 77 88 84 245 |
Metal price assumptions: Ag $18/oz; Pb $1.00/lb; Zn $1.25/lb; respective payables of 85%, 90%, and 70%.
Mineral Resources:
The Mineral Resource estimates for the GC Mine were prepared by Mr Shoupu Xiang, Resource Geologist of Silvercorp, and were reviewed by an independent Qualified Person, Ms. Dinara Nussipakynova, P.Geo of AMC, who takes responsibility for the estimates. Resources were estimated using a block modelling approach, with MicromineTM software. Interpolation was carried out using inverse distance cubed (ID3) for all the veins. Estimates were made for a total of 110 mineralized vein structures for the GC Mine.
The Mineral Resources are reported above a cut‐off of 100 g/t silver equivalent (AgEq). Cut‐off grades are based on in situ values in AgEq terms in grams per tonne (after application of mining recovery and payable values) and incorporate all mining and processing costs (no capital, G&A, or exploration drilling and tunnelling costs) provided by Silvercorp and reviewed by AMC.
Mineral Resources at December 31, 2018 total 9.1 million tonnes (inclusive of Mineral Reserves) in the Measured and Indicated categories, grading 84 g/t Ag, 1.2% Pb, and 2.8% Zn, containing approximately 24.5 million ounces of silver, 233 million pounds of lead, and 564 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
| Resource classification | Tonnes (Mt) | Ag (g/t) | Pb (%) | Zn (%) | Contained metal | ||
| Ag (koz) | Pb (Mlbs) | Zn (Mlbs) | |||||
| Measured Indicated Measured and Indicated Inferred | 3.366 5.686 9.052 7.245 | 96 77 84 91 | 1.4 1.0 1.2 1.0 | 3.3 2.5 2.8 2.4 | 10,350 14,155 24,505 21,167 | 107 126 233 166 | 246 318 564 391 |
Notes: CIM Definition standards (2014) were used for reporting the Mineral Resources Mineral Resources are reported at a cut‐off grade of 100 g/t AgEq The equivalency formula is Ag g/t+46.1*Pb% + 42.8*Zn% using prices of $18/oz Ag, $1.00/lb Pb and $1.25/lb Zn and estimated recoveries of 77% Ag, 88% Pb, and 84% Zn.
Sample results up to 31 December 2018.
Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
The numbers may not compute exactly due to rounding.
Source: Silvercorp, reproduced as a check by AMC Mining Consultants (Canada) Ltd.
Qualified Persons
D. B. Nussipakynova, P.Geo., H. A. Smith, P.Eng., A. Riles, MAIG and P. R. Stephenson, P.Geo. of AMC Mining Consultants (Canada) Ltd. are Qualified Persons as defined by National Instrument 43‐101. D. B. Nussipakynova, H. A. Smith, P. R. Stephenson and A. Riles have reviewed and consented to this press release and believe it fairly and accurately represents the information in the Technical Report that supports the disclosure.
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
For further information
Lon Shaver Vice President Silvercorp Metals Inc.
Phone: (604) 669‐9397 Toll Free: 1(888) 224‐1881 Email: [email protected] Website: 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.