VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - May 3, 2005) - SILVERCORP METALS INC. ("Silvercorp") (TSX VENTURE:SVM) is pleased to report increased resource calculations in a new National Instrument ("NI") 43-101 technical report on the Ying Project:
- Measured and Indicated Resource: 420,453 tonnes averaging 1,393 grams per tonne ("g/t") silver ("Ag"), 32.76% lead ("Pb"), 9.99% zinc ("Zn"), for contained metals of 18.8 million ounces of silver, 137,730 tonnes of lead, and 42,004 tonnes of zinc, or 43,923,882 ounces Silver equivalent.
- Inferred Resource: 495,205 tonnes averaging 1,539 g/t Ag, 35.01% Pb, 9.56% Zn, containing 24.5 million ounces of silver, 173,394 tonnes of lead, and 47,323 tonnes of zinc, or 55,242,321 ounces silver equivalent.
- This represents a significant movement of Resources up from the Inferred to the Measured and Indicated category, with Silver increasing 204%, Lead 308% and Zinc 209% from the prior calculation.
- Grades have also increased to a level where the Resource is approaching the equivalent of processed concentrate.
The report was completed by independent qualified person, Chris Broili, C.P. Geo., L.P. Geo. and follows up on his original report completed April 21, 2004. The resource calculation is based on only 5 of the 7 veins currently under development. Exploration is underway on the S7 and S8 veins which were not included in the calculation. An additional 33 veins on the Ying project are known and being investigated by a regional exploration program.
In the new NI 43-101 Technical Report, Mr. Broili made the following statements:
"From August 2004 to March 2005, a total of 3,550 meters ("m") of drifting, declines, and raises and 1,500 m of underground drilling was completed. Found's tunneling and underground drilling were primarily focused on veins S2, S6, S14, S16E and S16W. In addition, Found widened two main access tunnels, CM102 and CM103 to 2.0 by 2.2 m from 2.0 by 1.8 m for over 930 m and 390 m, respectively. At present, veins S1, S2, S4, S5, S6, S7, S14, S16E, S16W, and S17 can be accessed through tunnels CM103 and CM102. Vein S8 will be reached when CM102 is extended another 80 m."
"Five of the recently explored veins (S2, S6, S14, S16E and S16W veins) on the Ying property have an Inferred Resource of 495,205 tonnes averaging 1,539 grams per tonne ("g/t") silver ("Ag"), 35.01per cent ("%") lead ("Pb"), 9.56% zinc ("Zn"), containing 24.5 million ounces of silver, 173,394 tonnes of lead, and 47,323 tonnes of zinc at an averaging 0.42 m wide. In Measured and Indicated categories, the five veins have 420,453 tonnes averaging 1,393 g/t Ag, 32.76% Pb, 9.99% Zn at an averaging 0.42 m wide. The contained metals for the Measured and Indicated Resources are 18.8 million ounces of silver, 137,730 tonnes of lead, and 42,004 tonnes of zinc."
"Resource estimates were not made for two major veins S7 (3,500 m in length) and S8 (4,200 m in length) due to lack of sufficient work by Found although they were included in the author's April 2004 resource estimates. S7 and S8 have similar types of massive galena sheets mineralization as the other veins, so it seems likely that tunneling and underground drilling on these veins will probably find new Pb-Zn-Ag resources."
The following two tables list a break-down of the resource estimate and parameters used for the five veins extracted from the NI 43-101 report. The standard definitions of resources provided by the Canadian Institute of Mining, Metallurgy and Petroleum in the CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines adopted by the CIM Council on August 20, 2000 were used.
Table 1. Resource estimates on the Ying property
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Ag Ag Pb Zn Ag Equiv(i)
Vein Resource -------------------------------------------------
# (Tonnes) (g/t) (oz/t) (%) (%) (g/t)
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Measured Resources
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S2 7,313 2078 66.81 33.25 9.27 3921
S6 8,463 1652 53.11 36.98 8.16 3599
S14 48,078 2014 64.75 47.22 3.72 4183
S16E 31,864 1363 43.82 31.45 13.44 3328
S16W 133,764 1168 37.55 28.43 11.39 2908
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Total 229,481 1419 45.63 33.25 9.88 3291
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Indicated Resources
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S2 5,127 2,078 66.81 33.25 9.27 3921
S6 5,630 1,652 53.11 36.98 8.16 3599
S14 31,689 2,014 64.75 47.22 3.72 4183
S16E 14,567 1,363 43.82 31.45 13.44 3328
S16W 133,958 1,168 37.55 28.43 11.39 2908
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Total 190,971 1362 43.79 32.16 10.12 3199
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Measured and Indicated Resources
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Total 420,453 1,393 44.79 32.76 9.99 3,249
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Inferred Resources
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S2 40,572 2,078 66.81 33.25 9.27 3921
S6 11,271 1,652 53.11 36.98 8.16 3599
S14 137,133 2,014 64.75 47.22 3.72 4183
S16E 129,815 1,363 43.82 31.45 13.44 3328
S16W 176,414 1,168 37.55 28.43 11.39 2908
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Total 495,205 1538.97 49.48 35.01 9.56 3470
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(i)Ag Equivalent is calculated using US$6.5/oz Ag, US$0.40/lb Pb, and
US$0.45/lb Zn
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Contained Metal Resource
Vein -------------------------------------------------------------
# Ag (oz) Pb (t) Zn (t) Ag Equiv(i) (oz)
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Measured Resources
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S2 488,567 2,432 678 921,817
S6 449,479 3,129 691 979,331
S14 3,113,148 22,702 1,789 6,465,421
S16E 1,396,314 10,021 4,282 3,409,016
S16W 5,023,153 38,029 15,236 12,506,193
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Total 10,470,661 76,314 22,675 24,281,778
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Indicated Resources
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S2 342,539 1,705 475 646,293
S6 299,024 2,082 459 651,518
S14 2,051,907 14,963 1,179 4,261,424
S16E 638,364 4,581 1,958 1,558,527
S16W 5,030,442 38,084 15,258 12,524,341
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Total 8,362,276 61,416 19,329 19,642,104
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Measured and Indicated Resources
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Total 18,832,937 137,730 42,004 43,923,882
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Inferred Resources
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S2 2,710,598 13,490 3,761 5,114,287
S6 598,618 4,168 920 1,304,278
S14 8,879,636 64,754 5,101 18,441,328
S16E 5,688,734 40,827 17,447 13,888,698
S16W 6,624,760 50,155 20,094 16,493,730
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Total 24,502,345 173,394 47,323 55,242,321
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(i)Ag Equivalent is calculated using US$6.5/oz Ag, US$0.40/lb Pb, and
US$0.45/lb Zn
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Dimension & Parameters In Resource Estimates Of 5 Veins
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Length Width Thickness Secific Ratio of Total Length
Vein# (m) (m) (m) gravity Mineralization Of Vein (m)
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S2 200 320 0.43 4.19 46.40% 1,200
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S6 136 337 0.27 4.25 47.80% 1,200
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S14 695 345 0.35 4.21 64.50% 1,400
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S16E 500 357 0.46 4.18 51.10% 1,000
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S16W 850 380 0.44 4.6 68.20% 2,000
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Mr. Broili also stated:
"In comparison to the resource estimate in the author's first 43-101 report (2004 report), this new indicated and measured mineral resources decreases the total tonnages of resource, but the grade increases for an overall expansion of total resource. The expansion of the measured and indicated silver resource is 204%, lead resource is 308% and the zinc resource is 209%, while reduction of the inferred silver resource is 47%, the lead resource is 53% and zinc resource is 23%. The deduction of the inferred resource is due to a major proportion of the inferred resource being converted to an indicated or measured resource."
The above resource estimates are based on the assumption that certain intervals along the vein are mineralized above the "cutoff" grade and thickness. The cutoff grade and vein thickness used for resource calculations is 1,250 g/t silver equivalent grade over a minimum 0.1 m thickness. Meanwhile, a ratio of mineralization ("ROM") or internal waste on these "pinch and swell" veins is used in determining the percentage of the vein mineralized above the cutoff grade and thickness, then calculating the resource tonnage of the polygonal block based on that percentage. In other words, if 60 meters over a 100 meter sampled interval is above the cutoff, then only 60% of the block is included in resource calculation. Cross-sections indicate very good grade and thickness continuity in a vertical sense; the grade and thickness continuity is lower in a horizontal sense.
Mr. Broili continues:
"Top-cuts of silver analysis composites were done for all resource categories in S14 and S16W veins since they have large assay populations. Top-cut values are calculated using the 95th percentile, which is consistent with industry standard procedures. The top-cuts are 3,682 g/t Ag for S14 and 2,880 g/t Ag for S16W."
For the purpose of completing a new resource estimate based on exploration work completed by Silvercorp, the following cost parameters were used by Mr. Broili, based on signed contracts for mining, milling, and concentrate and direct-to-smelter high grade ore sales:
- Exchange rate: 1 US$ equals 8.27 Chinese Yuan
- Long term metal Prices: Ag US$6.5/oz; Pb US$0.40/lb; Zn US$0.45/lb; Au US$390/oz.
- Mining: US$9.7 per tonne
- Milling: US$17 per tonne
- Shipping: US$5 per tonne (from mine site to mill)
- Administration: US$ 4 per tonne
In his second NI43-101 report, Mr. Broili has also recommended a Phase 2 Exploration and Development Program of US$5 million, affirming the program proposed by Silvercorp's management for 2005.
In commenting on the updated resource estimates, Chairman and CEO of Silvercorp, Dr. Rui Feng said: "We are excited to see this new independent resource estimate for the Ying Project, which confirms substantial silver and lead resources with concentrate-like grades. We anticipate being able to further increase these resources through the rapidly progressing exploration and development program now underway. We are in the process of preparing mining permit applications, with the intention of initially mining and processing 100,000 tonnes per year at these high grades."
Exploration on the Ying Project is carried out through Silvercorp's Sino-foreign joint venture company, Henan Found Mining Co. Ltd. ("Found"), which holds 100% of the Ying Project and in which Silvercorp is earning a 77.5% interest. Myles Gao, P.Geo, President of Silvercorp, is the General Manager of Found. Mr. Gao is also the Qualified Person on the project.
Statements in this press release other than purely historical information, including statements relating to the Company's future plans and objectives or expected results, constitute forward-looking statements. Forward-looking statements are based on numerous assumptions and are subject to all of the risks and uncertainties inherent in the Company's business, including risks inherent in mineral exploration and development. As a result, actual results may vary materially from those described in the forward-looking statements.
SILVERCORP METALS INC.
Rui Feng, Ph.D., Chairman & CEO
FOR FURTHER INFORMATION PLEASE CONTACT:
Silvercorp Metals Inc.
Rui Feng (Ph.D.)
Chairman & CEO
(604) 669-9397
(604) 669-9387
info@silvercorp.ca
www.silvercorp.ca
