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Operations

GC Mine

  • Introduction
  • Ownership
  • History

Introduction

Silvercorp acquired the Gaocheng ("GC") silver-lead-zinc exploration permit in April 2008. Located about 200 kilometres west of Guangzhou City, Guangdong Province, southern China, the permit covers an area of 5.5 km2. Since 2001, the GC permit has been explored for gold, silver, lead, zinc, and sulphur. In December 2010, Silvercorp received a mining permit on the GC project and construction of a 1,600 tpd mine and mill commenced shortly thereafter.  In the fall of 2014 the Company commenced commercial production from the mine. Since then, the GC property has contributed 4.6M ounces of silver and 169M pounds of lead and zinc to June 30, 2021.

Ownership

Silvercorp indirectly holds a 99% ownership interest in the GC Property.

History

Various state-sponsored Chinese Geological Brigades and companies have conducted geological and exploration work in the project area, with systematic regional geological surveys commencing in 1959. Historical drilling commenced in 2001.

Before 2005, illegal mining activity resulted in the excavation of several tunnels and small-scale mining. It is reported that a total of 1,398 m of excavation comprised of 10 adits and tunnels had been completed on the property through the illegal activity.

A total of 43 diamond drillholes for a combined total of 13,463.74 m was drilled on the Property between 2001 and 2007 prior to the property acquisition by Silvercorp. Diamond drillholes were drilled using PQ size in overburden, then reduced to HQ size for up to 100 m depth.

Please refer to the 2021 GC technical report completed by AMC Mining Consultants (Canada) Ltd. for further information.

Geology

The GC property is located on the east margin of the Luoding basin, east of the Wuchuan – Sihui major fault within the north portion of the Yunkai uplift of the South China Orogenic Belt. Northeast striking structures and arc structures form the basic geological framework of the region. Deposits on the property occur at the intersection of a north-easterly striking fault zone and a near east-westerly striking fault zone.

Basement geology in the area comprises late Proterozoic Sinian sedimentary clastics and carbonate rocks; Palaeozoic (Ordovician, Silurian, Devonian, Carboniferous) sedimentary clastics and carbonate rocks; and Mesozoic (Triassic) coal-bearing clastic rocks and Cretaceous red clastic rocks. Ag-Pb-Zn poly-metallic deposits occur within late Proterozoic rocks. Cu-Pb-Zn, Mn, and Au-Ag deposits occur within Palaeozoic rocks.

The GC Project is located at the intersection between the Wuchuan-Sihui Deep Fault zone and Daganshan Arc-ring structural zone. It is situated in the southwest part of the Daganshan uplift. Structures developed in the area are mainly the NWW-EW striking Gaocheng Fault zone, the NE striking Baimei Fault zone, and the Songgui Fault zone.

Basement rocks within the GC Project area encompass quartz sandstone, meta-carbonaceous siltstone, carbonaceous phyllite, calcareous quartzite, and argillaceous limestone of the Sinian Daganshan Formation; quartz sandstone and shale of the Triassic Xiaoyunwushan Formation, and sandy conglomerate and conglomerate of the Cretaceous Luoding Formation. These rocks are intruded by Palaeozoic gneissic, medium-grained biotite granite, and Mesozoic fine- to medium-grained adamellite, brownish, fine‑grained, biotite mylonite, granite porphyry, quartz porphyry, diabase, and aplite. The Mesozoic intrusives intruded along the south and southwest contacts of the Palaeozoic granites. The majority of Ag-Zn-Pb mineralization is hosted by the Mesozoic granite. The granite dips south and strikes west northwest, parallel to the majority of mineralized veins on the GC property.

Mineralization at GC is primarily hosted within a WNW-ENE trending, 4.8 km long and 2 km wide fault zone. This zone encompasses numerous veins which strike between 112° and 146° and dip between 65° to the southwest and sub-vertical. The average thickness of these veins is 0.89 m.

Mineral Resources:

The Mineral Resource estimates for the Gaocheng property were prepared by Mr. Shoupu Xiang, Resource Geologist of Silvercorp, and were reviewed by independent Qualified Person, Ms. Dinara Nussipakynova, P.Geo of AMC who takes responsibility for the estimates. The data used in the Mineral Resource estimation includes results of all drilling carried out on the Property to 31 December 2020. The estimation was carried out in Micromine™ software. Interpolation was carried out using inverse distance squared (ID2) for all the veins.

The Mineral Resources are reported above a cut-off of 105 g/t silver equivalent (AgEq). Cut-off grades are based on in situ values in AgEq terms in grams per tonne (after application of mining recovery and payable values) and incorporate all mining and processing costs provided by Silvercorp and reviewed by AMC.

The estimated Mineral Resources and metal content for the property as of December 31, 2021 are detailed in Table 1 below.

Table 1 Gaocheng Property - Measured & Indicated, and Inferred Mineral Resources

(Inclusive of Mineral Reserves)

Resource Classification Tonnes (Mt) Ag (g/t) Pb (%) Zn (%) Contained Metal
Ag (koz) Pb (Mlbs) Zn (Mlbs)
Measured 5.286 88 1.3 3.1 14,906 154 360
Indicated 4.747 75 1.1 2.5 11,457 111 259
Measured and Indicated 10.033 82 1.2 2.8 26,363 265 619
Inferred 8.441 87 1.0 2.4 23,562 195 442

Notes: 

• CIM Definition Standards (2014) were used for reporting the Mineral Resources.

• Mineral Resource are reported at a silver equivalent (AgEq) cut-off grade of 105 g/t AgEg.

• The equivalency formula is Ag g/t+50.46*Pb%+43.53*Zn% using prices of US$18.20/oz Ag, US$0.94/lb Pb, and US$1.08/lb Zn and estimated recoveries of 82.6% Ag, 89.5% Pb, and 87.3% Zn.

• Sample results up to 31 December 2020.

• Mineral Resources have been depleted to account for mining to 31 December 2020.

• Veins factored to a minimum extraction width of 0.4 m.

• Mineral Resources are inclusive of Mineral Reserves reported in Section 15.

• Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. An Inferred Mineral Resource is that part of a Mineral Resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.

• The numbers may not compute exactly due to rounding.

Mineral Reserves:

The Mineral Reserve estimates for the Property were prepared by Silvercorp under the guidance of independent QP, Mr H. Smith, P.Eng., who takes QP responsibility for those estimates.

The Mineral Reserve estimation is based on the assumption that current stoping practices will continue at the Gaocheng property, namely predominantly shrinkage stoping but also with some cut and fill resuing. Minimum mining widths of 1.0 m for shrinkage and 0.5 m for resuing, and minimum dilution of 0.20 m total for shrinkage and 0.10 m for resuing cut and fill stopes are assumed. Full breakeven COGs used are 215 g/t AgEq for shrinkage and 275 g/t AgEq for resuing.

Table summarizes the Mineral Reserves estimate for the Gaocheng mine. 63% of the Mineral Reserve tonnage is categorized as Proven and 37% is categorized as Probable.

Table 2 Gaocheng Property - Mineral Reserves

Reserve classification Tonnes (Mt) Ag (g/t) Pb (%) Zn (%) Contained metal
Ag (koz) Pb (Mlbs) Zn (Mlbs)
Proven 2.587 93 1.5 3.3 7,743 84 189
Probable 1.544 95 1.5 3.0 4,740 51 103
Proven + Probable 4.131 94 1.5 3.2 12,483 135 293

Notes to Mineral Reserve Statement:

• Canadian Institute of Mining, Metallurgy and Petroleum Standards (2014) were used for reporting the Mineral Reserves.

• Full breakeven cut-off grades: Shrinkage = 215 g/t AgEq: Resuing = 275 g/t AgEq.

• Marginal material cut-off grade: Shrinkage = 185 g/t AgEq; Resuing = 250 g/t AgEq.

• Dilution (zero grade) assumed as a minimum of 0.1 m on each wall of a shrinkage stope and 0.05 m on each wall of a resuing stope.

• Mining recovery factors assumed as 92% for shrinkage and 95% for resuing.

• Metal prices: Silver US$18.20/troy oz, lead US$0.94/lb, zinc US$1.08/lb, with respective payables of 65.5%, 86.2%, and 66.3%.

• Processing recovery factors: Ag – 82.6%, Pb – 89.5%, Zn – 87.3%.

• Effective date 31 December 2020.

• Exchange rate assumed is RMB6.80: US$1.00.

• Rounding of some figures may lead to minor discrepancies in totals.

Exploration

Silvercorp has carried out surface and underground exploration activities since 2008.

Surface-based exploration occurred primarily during 2008, which included soil sampling, geological mapping and trenching. Following up on geochemical anomalies, Silvercorp conducted trenching and pitting programs that exposed the mineralized veins on the surface and at shallow depth. A total of seven pits and one trench were excavated by Silvercorp exposing three veins.

Silvercorp completed more than 51.5 km of underground tunnelling and sampling at the Property through to 2018, and 29.2 km between 2019 and 2020.

The programs through to 2018 comprised 33,297 m of drifting along mineralized structures,

10,147 m of crosscutting across mineralized structures, and 8,833 m of raises. The 2019 and 2020 work comprised 14,940 m of drifting along mineralized structures, 7,288 m of crosscutting across mineralized structures, and 6,951 m of raises. Drifts and crosscuts have been developed at 40 m intervals vertically to increase geological confidence in the Mineral Resource.

Silvercorp completed its first phase of diamond drilling on the Property in 2008. Systematic drilling commenced on the property in 2011 and continued through to 2020.

In 2008, Silvercorp completed a 22-hole (10,082.6 m) surface drilling program, which resulted in the discovery of 15 mineralized veins. Silvercorp commenced a detailed, systematic drilling program at the GC project in 2011. Between 2019 and 2020, a total of 538 underground diamond drillholes (59,898.2 m) were completed. This brings the 2011 to 2020 totals to 1,664 underground diamond drillholes and 102 surface diamond drillholes. 48,307 samples have been taken from the drill core since 2011.

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