Silvercorp Metals Inc. ("Silvercorp” or the “Company”) (TSX/NYSE
American: SVM) announces that its subsidiary, Henan Found Mining
Co. Ltd. (“Henan Found”), won an online auction to acquire the
exploration rights to the Zhonghe Silver Project (the “Zhonghe
Project”) from the Henan provincial government. The auction was
held on December 17, 2020 and following a public comment period,
the Company received confirmation of its successful bid. The
Zhonghe Project covers an area of 4.96 square kilometres (“km”)
approximately 50 km (75 km by road) northeast of Silvercorp’s Ying
Mining District, also located in Luoning County.
Silver-lead-zinc mineralization at the Zhonghe
Project is similar to that found at the SGX Mine in the Ying Mining
District (i.e., massive galena lenses in structural veins).
Highlights of selected drill intercepts include:
- Hole
ZK2602 intercepted 3.55 metres (“m”) from 145.53 m grading
876 grams per ton (“g/t”) silver (“Ag”), 25.25% lead (“Pb”), and
15.39% zinc (“Zn”);
- Hole
ZK806 intercepted 1.95 m from 513.95 m, grading 1,592 g/t
Ag, 12.33% Pb and 3.45% Zn;
- Hole
ZK804 intercepted 1.71 m from 275.54 m, grading 955 g/t
Ag, 14.30% Pb and 10.82% Zn.
- Hole
ZK1104 intercepted 1.36 m from 283.16 m, grading 1,383 g/t
Ag, 29.92% Pb, and 5.08% Zn; and
- Hole
ZK4204 intercepted 1.63 m from 570.98 m, grading 1,446 g/t
Ag, 1.39% Pb, and 4.0% Zn;
The Company will utilize Henan Found’s existing
management team at the Ying Mining District to manage the future
development of Zhonghe. As the largest taxpayer in Luoning County,
Henan Found has established a good working relationship with the
Luoning government, has an excellent reputation within the local
community, and intends to bring in the local government and
community as 8% - 10% partners on the project. The Company expects
full support from the local government and community in the future,
converting the exploration right to a mining license and developing
operations at the Zhonghe Project.
The Zhonghe Project
The exploration right comprising the Zhonghe
Project is located in Dongshong Township of Luoning County and
covers an area of 4.9 km², being approximately 1.1 km wide
(east-west) by 4.9 km long (north-south). From March 2016 to August
2019, the Department of Natural Resources of Henan Province
completed 3,213 m³ of trenching and 36,091 m of diamond
drilling in 54 diamond drill holes that defined silver-lead-zinc
vein structures extending over 4.9 km long, and from surface at 640
m elevation down to minus 450 m elevation, dipping to the west at
an average of 70 degrees.
Based on the drill grid spacing of 175 m to 223
m along strike and 162 m to 272 m down dip, mineral resources for
silver, lead and zinc estimated using Chinese standards (not NI
43-101 compliant) were calculated by the No 1 Institute of
Geological and Mineral Resource Survey in Henan Province in 2019,
and published on the auction website.
Twenty-three drill holes intercepted significant
silver grades listed in the table below.
Hole ID |
From(m) |
To(m) |
Interval(m) |
TrueWidth(m) |
Ag(g/t) |
Pb(%) |
Zn(%) |
ZK006 |
614.75 |
618.21 |
3.46 |
1.84 |
475.25 |
7.85 |
6.21 |
ZK1104 |
283.16 |
284.52 |
1.36 |
0.91 |
1383.00 |
29.92 |
5.08 |
ZK1206 |
278.20 |
280.10 |
1.90 |
1.17 |
287.00 |
9.83 |
4.90 |
ZK1604 |
331.93 |
333.08 |
1.15 |
0.57 |
228.00 |
21.66 |
17.53 |
ZK2006 |
407.93 |
409.56 |
1.63 |
0.83 |
395.00 |
0.31 |
0.59 |
ZK2204 |
308.22 |
311.06 |
2.84 |
1.33 |
223.77 |
3.80 |
8.36 |
ZK2602 |
145.53 |
149.08 |
3.55 |
1.88 |
875.68 |
25.35 |
15.39 |
ZK2606 |
430.50 |
431.79 |
1.29 |
0.58 |
304.00 |
3.05 |
2.72 |
ZK2701 |
25.68 |
26.50 |
0.82 |
0.45 |
385.00 |
0.56 |
2.45 |
ZK2702 |
404.20 |
405.81 |
1.61 |
0.60 |
376.00 |
0.68 |
0.85 |
ZK2702 |
693.25 |
694.84 |
1.59 |
0.93 |
475.00 |
3.41 |
6.28 |
ZK2703 |
475.98 |
477.38 |
1.40 |
0.93 |
239.00 |
2.07 |
4.51 |
ZK306 |
334.69 |
336.76 |
2.07 |
1.67 |
264.00 |
0.63 |
6.20 |
ZK3102 |
82.03 |
83.97 |
1.94 |
0.60 |
342.00 |
3.19 |
1.52 |
ZK3204 |
426.53 |
429.34 |
2.81 |
1.77 |
202.00 |
4.21 |
2.31 |
ZK3904 |
470.30 |
472.19 |
1.89 |
0.66 |
231.00 |
1.70 |
2.25 |
ZK3906 |
736.98 |
737.88 |
0.90 |
0.26 |
405.00 |
0.65 |
0.76 |
ZK404 |
188.57 |
189.77 |
1.20 |
0.84 |
822.00 |
2.12 |
10.15 |
ZK4204 |
570.98 |
572.61 |
1.63 |
0.86 |
1446.00 |
1.39 |
4.00 |
ZK4306 |
545.46 |
547.20 |
1.74 |
0.58 |
400.00 |
0.23 |
1.90 |
ZK4308 |
771.60 |
773.14 |
1.54 |
0.51 |
354.00 |
1.14 |
2.88 |
ZK804 |
275.54 |
277.25 |
1.71 |
1.27 |
955.00 |
14.30 |
10.82 |
ZK806 |
513.95 |
515.90 |
1.95 |
1.29 |
1592.00 |
12.33 |
3.45 |
Auction Results and Payment
Details
- The reserve
price for the Zhonghe Project Exploration Permit was RMB 485
million per the auction notice posted by the Department of Natural
Resource of Henan Province. The final winning bid submitted by the
Company was RMB 495 million, or approximately US$76 million.
- The Company
will enter into a mineral rights transfer contract with the
Department of Natural Resources of Henan Province and will make a
first payment of approximately US$15.2 million, once the project
area is cleared by the authorities as a non-military area. The
first payment represents 20% of the purchase price.
- The remaining
80% of the purchase price is due only in the event the exploration
right is converted into a mining license and shall be paid annually
over the duration of the mining license.
- When the
exploration right is converted to a mining license, no additional
mineral rights transfer payments will be required to be paid
(according to Article 16 of The Interim Measures for the
Administration of Fee Collection of the Transfer of Mining Rights
by Government).
Future Exploration and Development
Plans
Based on China's regulations on issuing mining
licenses, one requirement is that this project will need to be
advanced to “exploration stage”, that is, at least 50% of the
resource estimates shall be defined by a drilling grid averaging no
greater than 75 m by 75 m. For 50% of the area of mineralization (4
km long by 1 km wide) at the Zhonghe Project to reach a drilling
grid of 75 m by 75 m from its current stage, it is estimated
200,000 m in 350 holes will need to be drilled. The Company plans
to initiate a drilling campaign in the first quarter of 2021 that
will be completed by 2022.
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.
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 ShaverVice PresidentSilvercorp Metals
Inc.
Phone: (604) 669-9397Toll Free: 1 (888)
224-1881Email: investor@silvercorp.ca 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 forward-looking
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forward-looking statements. Forward-looking statements relate to,
among other things: future profitability, growth, acquisitions and
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Securities.
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, 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; 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, as well as those risks and
uncertainties discussed in the Company’s corresponding MD&A and
other public filings of the Company. 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 expressed or implied in the forward-looking
statements.
The Company’s forward-looking statements are
necessarily based on a number of estimates, assumptions, beliefs,
expectations and opinions of management as of the date of this news
release that while considered reasonable by management of the
Company, are inherently subject to significant business, economic
and competitive uncertainties and contingencies. These estimates,
assumptions, beliefs, expectations and opinions include, but are
not limited to, those related to the Company’s ability to carry on
current and future operations, including: the duration and effects
of COVID-19 on our operations and workforce; development and
exploration activities; the timing, extent, duration and economic
viability of such operations; the accuracy and reliability of
estimates, projections, forecasts, studies and assessments; the
Company’s ability to meet or achieve estimates, projections and
forecasts; the availability and cost of inputs; the price and
market for outputs; foreign exchange rates; taxation levels; the
timely receipt of necessary approvals or permits; the ability to
meet current and future obligations; the ability to obtain timely
financing on reasonable terms when required; the current and future
social, economic and political conditions; and other assumptions
and factors generally associated with the mining industry. 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. 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. For the reasons
set forth above, investors should not place undue reliance on
forward-looking statements.
CAUTIONARY NOTE TO US
INVESTORS
This news release has been prepared in
accordance with the requirements of NI 43‐101 and the Canadian
Institute of Mining, Metallurgy and Petroleum Definition Standards,
which differ from the requirements of U.S. Securities laws. NI
43‐101 is a rule developed by the Canadian Securities
Administrators that establishes standards for all public disclosure
an issuer makes of scientific and technical information concerning
mineral projects.
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