2006

2006 Final Joint Venture Contract signed and positive due diligence technical report received on the HPG Gold-Silver-Lead properties, Henan, China

VANCOUVER, BRITISH COLUMBIA – May 3 , 2006 - Silvercorp Metals Inc. ("Silvercorp") is pleased to announce that it has signed a final cooperative joint venture contract with a private Chinese company ("HT Mining") to acquire a 60% interest in the HPG silver (Ag)–gold (Au)–lead (Pb) properties, located within the Ying Silver Project area, Henan Province, China, by paying 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 joint venture (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. The HPG properties include two adjacent mining licenses ( 0.1453 km 2 and 0.3878 km 2 ) which hold lead, and lead-silver mining rights, respectively, one exploration permit ( 5.86 km 2 ) surrounding the mining licenses, a 200 t/day ore dressing flotation mill and associated equipment and facilities.

A positive National Instrument (NI) 43-101 technical report on the HPG properties prepared by SRK Consulting has also been received. Highlights of the assay results from the report on checking samples and historical drill core include (see Tables 1 and 2 for detail):

On the H17 vein, tunneling on the 500 metre (m) level ( 500 L ) intercepted 1.5m, horizontal width. grading 8.54 gram per tonne (g/t) gold (Au), 191.7 g /t silver (Ag) and 20.44% lead (Pb)

On the H15 vein, tunneling on the 686m level ( 686 L ) intercepted 1.0m, horizontal width, grading 8.50 g /t Au, 221.6 g /t Ag, 37.54% Pb, 0.65% zinc (Zn) and 0.26% copper (Cu)

On the H16 vein, historical drill hole ZK1505 intercepted 2.5m grading 51.97 g /t Au, 82.7 g /t Ag, 3.85% Pb,

The following summarizes the NI 43-101 Technical Report:

The HPG properties are located in Qinling silver-lead mineralization belt, and the extension of Silvercorp's YING property, and possess the same geological conditions as the YING property. Previous exploration work including surface trenching, diamond core drilling, and tunnelling by No. 1 Geological Brigade of Henan Bureau of Non-ferrous Geological Exploration during 1988 to 1999 has defined more that 20 veins with silver-gold-lead mineralization in the HPG properties.

Exploration Potential

During SRK's site visit, the mining activities were on 720m , 570m , 540m and 420m levels, and exploration was on 698m , 630m , 500m , 460m , and 380m levels for H15 and H17 veins (Table 1). SRK learned that the underground workings above 420m levels are used to explore and mine H15 vein, and tunnels below 500 L are used to explore and mine H17 vein. SRK was told that H17 vein above the 500 L has not been explored. SRK observed some exposure of mineral bodies in existing tunnels.

During the site visit, SRK took 55 check samples from ore chutes of mining stopes, exposed veins generally on the ceilings of drifts, and outcrops on the surfaces within the HPG properties. Analytical results of the check samples taken from ore chutes in general returned high grades of lead and/or gold. Most of the continuous chip samples taken from the ceilings of underground workings also returned good assays, indicating that there are in-situ mineralized zones.

For H17 vein, samples taken at the 500 L , the top-most level, returned high grades of gold and good grades of lead and silver (see Table 1), indicating that the potential of the vein upward is good; and samples taken on 380 L which is the lowest level in the mine over about 135m along strike contain high grades of lead, gold, silver, zinc and copper, indicating a great potential of the body to extend to depth.

Previous trenching and drilling intercepted significant gold mineral zones in H16 vein (see Table 2) in the south-western extension of the HPG mine, and lead mineralization in H17 vein in the north-eastern extension of the mine. Considering that previous drilling programs were conducted at 160m spacing in the north-eastern extension area, and that mineable mineralized bodies are commonly 70 to 100m long, further exploration is warranted in the area. There are also other veins, such as H20 that have not been tested by drilling. Therefore there is a potential to host gold-silver-lead mineralization in the extensions within the exploration permit area.

Table 1. Assaying Results for the Checking Sample of H17 and H15 Veins by SRK
Vein	Sample No.	Elevation (m level)	Horizontal Width	Au	Ag	Pb	Zn	Cu
			(m)	(g/t)	(g/t)	(%)	(%)	(%)
H17	HPG1701	500 L	1.5	8.54	191.7	20.44	0.13	0.16
	HPG1702	500 L	Ore chute	8.96	107.7	2.01	0.56	0.13
	HPG1703	500 L	Ore chute	5.42	179.8	11.54	1.90	0.50
	HPG1704	500 L	Ore chute	5.39	123.3	3.29	0.89	0.22
	HPG1705	500 L	Ore chute	5.94	75.0	1.41	0.20	0.41
	HPG1706	500 L	Ore chute	6.86	439.7	5.09	0.55	0.40
	HPG1707	500 L	1.45	2.29	133.0	5.22	0.31	0.25
	HPG1708	500 L	0.83	0.51	39.0	5.57	0.05	0.34
	HPG1709	500 L	1.6	1.94	206.3	12.63	1.63	0.43
	HPG1710	420 L	1.3	2.47	209.3	22.80	0.07	0.25
	HPG1711	380 L	1.4	0.35	8.0	0.30	0.18	0.01
	HPG1712	380 L	0.75	0.42	11.9	0.16	0.01	0.04
	HPG1713	380 L	1.3	0.90	55.6	14.43	0.10	1.04
	HPG1714	380 L	1	2.90	226.6	14.53	1.34	0.50
	HPG1715	380 L	0.9	0.66	63.1	2.49	1.05	0.44
	HPG1716	380 L	1.2	1.40	63.0	0.50	6.25	0.16
	HPG1717	380 L	1	1.86	240.8	8.38	7.84	0.43
	HPG1718	380 L	1.2	0.94	378.0	43.93	2.24	0.47
	HPG1719	380 L	1.5	2.00	131.6	8.01	1.36	0.97
	HPG1720	380 L	0.7	2.60	149.5	36.48	0.04	0.38
	HPG1721	380 L	1	0.94	110.8	34.60	0.02	0.48
	HPG1722	380 L	1.3	0.07	12.3	0.61	0.07	0.04
	HPG1725	Surface	0.8	0.27	<3	0.24	0.03	0.02
H15	HPG1501	686 L	0.95	0.42	161.9	35.33	0.04	0.11
	HPG1502	686 L	1	8.50	221.6	37.54	0.65	0.26
	HPG1503	686 L	Ore chute	2.02	397.7	19.23	0.36	0.76
	HPG1504	686 L	Ore chute	1.14	320.9	18.51	0.22	0.83
	HPG1505	686 L	Ore chute	2.62	812.6	24.84	0.79	0.88
	HPG1506	686 L	Ore chute	0.70	185.7	8.62	0.18	0.49
	HPG1507	686 L	Ore chute	2.65	365.0	12.50	0.34	0.56
	HPG1508	686 L	0.85	1.09	58.5	0.93	0.09	0.26
	HPG1509	630 L	0.6	2.12	63.7	0.77	0.04	0.44
	HPG1510	630 L	0.8	1.10	92.2	1.17	0.05	1.08
	HPG1511	630 L	1.6	2.28	101.9	0.96	0.15	0.44
	HPG1512	630 L	1.1	1.60	198.9	1.74	0.12	0.16
	HPG1513	630 L	0.95	0.99	29.3	0.44	0.29	0.36
	HPG1514	500 L	1.4	1.33	253.3	20.18	0.40	0.49
	HPG1515	500 L	1.2	1.73	138.8	1.83	0.38	0.26
	HPG1516	500 L	0.75	4.18	303.0	11.93	0.98	0.37
	HPG1517	420 L	Ore chute	0.38	300.8	5.58	0.12	0.30
	HPG157201	720 L	1.7	0.56	85.2	7.94	0.05	0.31
	HPG157202	720 L	Grab	1.10	70.3	6.68	0.06	0.16
	HPG157203	720 L	1.7	0.21	136.1	27.56	0.02	0.24
	HPG157204	720 L	Grab	0.53	51.3	4.29	0.11	0.18
	HPG157205	720 L	1.7	0.32	58.5	4.60	0.16	0.38
	HPG157206	720 L	Ore chute	0.74	67.8	6.56	0.08	0.25
	HPG157207	720 L	Ore chute	0.46	41.2	2.74	0.08	0.12
	HPG157208	720 L	Ore chute	0.19	39.6	3.22	0.04	0.18
	HPG157209	720 L	Ore chute	2.39	121.3	5.48	0.12	0.20
	HPG157210	720 L	1.7	0.07	13.2	0.97	0.05	0.08
	HPG157211	720 L	1.8	0.21	7.2	0.90	0.13	0.05
	HPG157212	720 L	1.5	0.21	27.8	1.27	0.05	0.06
	HPG157213	720 L	2	0.05	4.0	0.98	0.05	0.01
	HPG1525	surface	1.6	0.10	22.5	0.80	0.11	0.07
	HPG1526	surface	1.7	0.07	8.2	1.00	0.14	0.02

Table 2. Historial Assay Results for H16 Vein
Veins	Drill Hole	From	To	(m)	Au (g/t)	Ag (g/t)	Pb (%)
H16	ZK2702	11.4	13.3	1.9	0.26	11.2	0.48
		13.3	14.3	1	6.08	22.2	1.08
		99.85	101.15	1.3	17	29.2	1.71
	ZK2308	45.8	46.95	1.15	1.08	84.5	1.16
	ZK1505	134.69	135.25	0.56	0.31	0.8	0.08
		135.25	137.75	2.5	51.97	82.73	3.85
		137.75	138.85	1.1	2.68	4.4	0.06
		138.85	139.95	1.1	0.82	1.3	0.04

Mining and Milling

HPG mine was established in 1995, with the current owner, (HT Mining) , acquiring the mine in November 2004. Ore shoots are mined by using shrinkage stoping. Mining is conducted from the lower to the upper level. The length of a stope extends over the length of the ore shoot about 70 to 100m long along strike. Mining and development are completed by a mining contractor. The geotechnical conditions in the hangingwall and the vein are generally good. As a general rule the development workings and stopes are not supported. There is only occasionally support by timber sets over short distances.

The flotation mill plant was built in 2002 with a designed capacity of 200 tonne per day. There are 2 stages of crushing in open circuit, producing -25 mm particles to the grinding circuit. The grinding circuit consists of a conic ball-mill and a screw classifier as a close circuit, which produces particles of 65% passing 200 mesh. The subsequent floatation circuit is designed to only capture lead and silver, with a one stage rougher floatation, 3 stages of cleaners and 3 stages of scavengers, to produce a Pb-Ag concentrate with a grade of 50% Pb and 4,000 g /t Ag (experimental data). At the time of the SRK inspection, the floatation cells for Pb and Ag appeared to be in reasonable operating order.

Future Exploration

To continue to explore and develop the HPG properties, SRK proposed a Phase I program with a budget of approximately $1.5 million Canadian (C$1.5 million). Additional expenditures would be subject to results obtained in the Phase I program.

Myles Gao, P.Geo, is Silvercorp's Qualified Person on the project under NI 43-101.


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 statement.