Silvercorp: Significant Gain In Zinc Mining

Silvercorp Metals (NYSE: SVM) is pleased to report the results of an updated National Instrument 43-101 Technical Report with an effective date of May 1, 2012, prepared by AMC Mining Consultants Ltd. covering the SGX , HPG, and TLP / LM underground mines on the Ying silver-lead-zinc property in Henan Province, China. The previous May 20, 2011 NI 43-101 Technical Reports were prepared by other parties, and covered the SGX, HPG and TLP / LM mines in three separate reports.
 
Highlights: Ying 2012 Technical Report
Reported mineral resources of 9.21 million tonnes (inclusive of mineral reserves) in the Measured and Indicated categories grading 324 grams per tonne (g/t) silver (Ag), 0.16 g/t gold (Au), 5.14% lead (Pb), and 1.83% zinc (Zn), containing 95.89 million ounces (oz) silver, 46,300 oz gold, 473,200 tonnes lead, and 168,800 tonnes zinc, representing a 28% increase in contained silver in Measured and Indicated Resources compared to the 2011 Technical Reports whereas the silver grade is reduced by 19%;

Defined mineral reserves of 9.79 million tonnes in the Proven and Probable categories grading 251 g/t Ag, 0.06 g/t Au, 4.05% Pb, and 1.40% Zn, containing 78.89 million oz silver, 18,900 oz gold, 396,300 tonnes lead, and 137,200 tonnes zinc. In comparison with the 2011 Technical Reports, contained silver in Proven and Probable Reserves is up 36% whereas the silver grade is reduced by 8%;

Based on Proven and Probable reserves, the Ying mine complex is a viable operation with a projected Life of Mine through to 2023 assuming an annual average production rate of approximately 6 million ounces of silver. It also has the potential for an extended LOM via further exploration and development, particularly in areas of inferred resources.

The results of the 2011 underground drilling program at the SGX mine show that most of the major mineralized vein structures at the SGX area are still open at depth.

Under plausible price and cost scenarios, Net Present Values range from $760 million to $1,132 million at an 8% discount rate, with a base case NPV of $896.6 million.

BY Greg Chalmers