2006

2006 Letter Agreement Signed to Acquire Operating Silver-Gold-Lead Mine within The Ying Silver Project Area, Henan Province,China

VANCOUVER, BRITISH COLUMBIA – March 13, 2006 - Silvercorp Metals Inc. ("Silvercorp") announces that it has signed a letter agreement with a private Chinese company ("HT Mining") to acquire a 60% interest in the Hou-Ping-Gou (HPG) silver (Ag)–gold (Au)–lead (Pb) mine, located within the Ying Silver Project area, Henan Province, China. This is the second acquisition in Silvercorp's plan to increase and consolidate its land holdings in the Ying Project area. The acquisition of the HPG Mine remains subject to signing of the final joint venture contract, positive due diligence by independent consulting geologists, and regulatory approvals.

Letter Agreement

Under the letter agreement, Silvercorp will enter into a joint venture contract with HT Mining, to create a joint venture company ("JV Company"), in which Silvercorp will have a 60% interest and HT Mining a 40% interest. HT Mining will contribute the HPG mine assets and permits to the JV Company and Silvercorp will pay a total of RMB¥42,000,000 (CDN$6 million @ CDN7.0/RMB) to HT Mining in installments, timed with the signing of the final joint venture contract, receipts of government approvals, issuance of the business license for the JV Company and transfer of the exploration and mining permits to the JV Company. Silvercorp will take over control of the operation upon receipt of a business license for the JV Company. Once Silvercorp has acquired its 60% interest, any future profit and funding requirement will be shared based on a 60%-40% ratio with a straight line dilution clause.

Current Operations

The HPG Mine, which has been in operation for about 5 years, is comprised of an exploration permit of 6.5 square km (km 2), two mining permits totaling 0.53 km 2; the HPG Mine itself and a lead-silver 250 tonnes per day (tpd) flotation mill about 10 km away from the mine. According to HT Mining, it is currently mining and milling about 200 to 250 tpd ores averaging 10% Pb, 8 ounces per tonne (oz/t) Ag and 0.05 oz/t Au with a total production cost of about US$30 per tonne of ore.

The HPG mine is mined through a shaft from 638m elevation at section Line 7 near H15 to 500m elevation near section line 10. The second access tunnel PD3 was developed at the 600m elevation along H 1 5. Through several sub-declines, the tunnel extends down to the 380m elevation, about 220 m from surface. Ore and waste rock loaded on rail cars are hauled from declines using a 1.6m diameter hoist.

HT Mining is currently focusing on mining a high-grade massive galena sheet lens in the H17 vein discovered in 2004 between exploration lines 20 and 28 . The lens is 1.5m to a maximum over 5m in width , 70 m in length and over 200 m in depth, extending from the 560 m elevation down to below 360 m elevation . Two continuous chip samples from the lens collected by Silvercorp's geologist s returned the following results:

Sample 1: 10.6 oz/t Ag, 0. 019 oz/t Au, and 20.62% Pb over 2.3m (true width) at the 460m elevation

Sample 2: 29. 6 oz /t Ag, 0. 035 oz/t Au, and 38.64% Pb over 1.4m (true width) at the 420m elevation

Mineralization and Historical Resource

Based on an independent geological report completed by Henan Bureau of Non-ferrous Geology and Mineral Resources (HGMR) , surface mapping , sampling, and trenching have defined over 20 northeast-trending veins, approximately 100 meters (m) apart, wit h in the HPG Mine permit area. Only five out the 20 veins ( H15, H16, H17, H18 and H20 veins), have been subjected to limited exploration. The Ag-Au -Pb mineralization in the HPG veins is similar to that of the veins in the SGX area of the Ying Silver project in orientation and mineralization, with mineralized quartz-carbonate vein structure containing massive galena sheets being hosted in the Archean gneisses. The m ajority of the veins are less than 1,000 m in strike length with widths ranging from 0.5 to 5.8 m, except H15 which is over 1,350m and H17 over 2,700m in length .

A total of 31 diamond drill holes totaling 9,041m were completed on the property by HGMR from 1988 to 1992 to intercept H15, H17 and H18 veins . However, only 7 drill holes intercepted significant mineralization (see Historical Drill Result Table below). Based on this drilling and tunnel sampling (see Historical Tunnel Assay Result below), HGMR made a resource estimate for parts of the H15 and H17 veins in 1999 . HGMR estimated parts of the two veins have about 2,100,000 tonnes of inferred resources grading about 0.06 oz/t Au, 6.75 oz/t Ag and 12.24% Pb, containing about 128,000 oz of Au, 14,000,000 oz of Ag, and 250,000 tonnes of Pb metal. The historical estimate is not compliant with NI 43-101, however it is believed to be reliable, subject to the fact that a p ortion of the resource has been mined out since the estimate. While the current operator has made some new discoveries since the estimate, the remaining Resource cannot be calculated with reliability until confirmed by the Company.
Future Exploration Program

In comparison to the Ying Project, mineralized veins at the HPG project tend to be much wider, while silver and lead grades are lower. HT Mining has focused solely on mining high grade zones as they are encountered, rather than carrying out systematic exploration tunnelling work, therefore the resource potential on the HPG property has not yet been properly established.

Silvercorp's geologists, however, believe that the Ag-Au -Pb vein mineralization in the HPG project area is similar to the mineralized quartz-carbonate vein structure containing massive galena sheets found at the S GX area of the Ying Silver project. The site visits made by Silvercorp indicate that mineralization on the major veins H15 and H17 remain open in all directions . Once Silvercorp has taken over the HPG operation a thorough systematic underground tunnelling and drilling program will be conducted on the twenty veins.

Historical Drilling and Tunneling Results

Significant Ag-Au-Pb mineralization was intercepted by previous drilling by HGMR on three veins – H15, H17, and H18. The assay results are listed in the Table below.

Historical Drilling Results Table for H15, H17 and H18 veins

Drill Hole	Mineralized Veins	From (m)	To (m)	Core Interval (m)	Elevation (m)	Au (g/t)	Ag (g/t)	Cu (%)	Pb (%)
ZK1608	H17	385.27	390.90	5.63	390	2.38	221.65		18.79
	Including	386.62	387.12	0.50		2.34	580.00		60.92
ZK1602	H15	141.81	143.16	1.35	690	0.77	146.41		14.58
ZK1604	H17	145.15	145.85	0.70	733	1.12	563.00		0.57
	H18	164.05	164.75	0.70	692	2.25	7.50		0.03
ZK1601	H17	67.20	68.10	0.90	760	1.90	4.40		0.01
ZK1606	H15	338.93	341.73	2.80	490	0.28	234.86	0.67	22.83
	Including	339.93	340.73	0.80		0.27	502.00	1.13	47.08
ZK1608	H17	246.93	249.25	2.32	590	7.49	186.22	0.93	8.14
	Including	247.74	248.54	0.80		19.40	285.00	1.26	12.65
ZK0002-1	H15	145.01	146.21	1.20	520	0.66	126.00		5.63
	H17	183.88	185.08	1.20	501	0.75	122.00		0.98

The best interval on H17 vein was from hole ZK1608, grading 2.34 g/t Au, 580 g/t Ag, and 60.92% Pb over 0.50m (core length) at 390m elevation, approximately 390m from the surface . The best interval on H15 vein was from hole ZK1606 , returning 502 g/t Ag, 47.08% Pb, and 1.13% Cu over 0.80m (core length) about 340m at 490m elevation. It is believed that these two high grade lenses has not been mined out yet.

No systematic tunneling work has been conducted by previous operators during the period from 1992 to the present. The o nly available assay results for channel samples collected by HGMR for Veins H15 and H17 from 1992 to 1999 are listed below.

Historical Tunnel Result Table for H15 and H17 veins

Veins	Tunnels	Elevation (m)	True Width (m)	Au (g/t)	Ag (g/t)	Pb (%)
H15	PD(15)32	800	0.40	4.09	204.82	8.53
	PD(15)31	782	1.29	1.40	129.18	14.57
	SJ4	762	1.00	1.87	174.57	11.63
	PD(15)30	728	1.08	0.98	110.50	15.04
	PD(15)44	711	1.31	1.24	145.33	12.43
	PD115	691	1.50	1.57	146.29	12.77
	PD108	690	1.34	2.97	137.40	2.84
	PD(15)26	650	1.30	1.95	365.08	12.95
	PD114	634	1.96	1.32	227.19	18.60
	PD1-H2	580	1.21	1.56	151.23	5.86
	PD1-H3	580	1.13	1.25	120.16	2.28
H17	PD119	836	0.93	19.24	93.32	1.06
	PD122	828	0.60	5.48	92.90	0.05
	PD121	824	1.10	25.93	56.88	0.22
	PD(15)44	714	0.99	1.30	130.51	10.29
	PD108	698	0.90	2.56	145.58	9.81
	PD115	693	1.20	3.93	602.83	10.78
	PD(15)26	653	1.37	3.46	164.44	7.96
	PD114	642	1.12	4.39	285.38	19.87
	PD(15)25	635	0.92	2.22	156.02	7.03
	PD(15)25	613	0.94	3.30	344.28	14.86
	PD1-H2	586	1.05	2.17	101.27	3.42
	PD1-H3	556	1.06	1.85	201.00	5.80
	PD1-H4	548	1.02	2.50	107.00	6.82
	PD1-H5	507	1.12	1.36	118.50	4.85
	PD1-H6	507	1.03	4.90	140.00	7.81

Quality Control
Myles Gao , P.Geo, is the Company's Qualified Person on the project under NI 43-101. The Company's Quality Control/Quality Assurance Program is disclosed in the January 4, 2006 Press Release.

Silvercorp is currently d eveloping the Ying Silver project into production through its 77.5% subsidiary, Henan Found Mining Co. Ltd., a Sino-foreign joint venture company which holds 100 per cent of the Ying project and operates under a 30-year business license. HGMR, an entity controlled by Henan provincial government, holds the remaining 22.5% interest. The HPG Mine will be held independently from Henan Found.


For further information: SILVERCORP METALS INC., Rui Feng, Chairman & CEO
Phone: (604) 669-9397, Fax: (604) 669-9387, Email: info@silvercorp.ca, Website: www.silvercorp.ca

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.