NYSE American:SVM $2.44 +0.04 TSX:SVM $3.11 +0.05

Operations

GC Project

  • 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.

Ownership

The GC exploration permit is 100% owned by Anhui Yangtze Mining Co. Ltd., ("Anhui Yangtze") a sino-foreign cooperative JV company owned 95% by Silvercorp (through a wholly owned subsidiary). The cost to acquire the interest was approximately US$60.27-million and was paid for 40% in cash ($24-million) and 60% in common shares of Silvercorp (4,532,543 common shares of the company were issued at CAD$8.20 per share). In addition to the GC exploration permit, Anhui Yangtze also owns 100% of the nearby 9.5km2 Shimentou silver-lead-zinc exploration permit.

History

Since 1959, extensive systematic geological mapping, airborne magnetic surveys, stream sediment geochemical surveys, local IP surveys and trenching was conducted by provincial geological bureau teams. From 2001 to 2008, a total of 23,547 metres of diamond drilling was completed on the GC project. Please refer to the 2009 GC technical report completed by AMC Mining Consultants (Canada) Ltd. for further information.

Geology

The GC project area is located in the north-eastern margin of Luoding Basin, the middle portion of uplift in the Huanan (South China) Fold System. The deposit occurs on the intersection of a north-easterly striking fault zone and a near east-westerly striking fault zone. North-east striking structures and arc structures form the basic geological framework of the region. Outcrop include Late Proterozoic Sinian sedimentary clastics and carbonate rocks, which host Ag-Pb-Zn polymetallic deposits in the region, Paleozoic Ordovician, Silurian, Devonian and Carboniferous sedimentary clastics and carbonate rocks which host some Cu-Pb-Zn, Mn and Au-Ag deposits, Mesozoic / Triassic coal-bearing clastics rocks, and Cretaceous red clastics rocks. Intrusive rocks occur in the central area of an arc/ring structure, include Paleozoic granite batholiths, and Mesozoic granite stocks and dykes. The stocks and dykes intrude in the inner zone of the arc/ring structure, and are closely related to the Ag-Pb-Zn polymetallic mineralization in the region.

The mineralization on the GC project is structurally controlled occurring in veins formed along fault traces which are enveloped by an alteration zone. The alteration zone may reach a few metres from the vein occurring in both the hanging and footwall. The identified Ag-Zn-Pb veins are divided into two groups - the NWW striking and NE striking.

Mineral Resources: AMC estimated Measured and Indicated Resources totaling 7.63 million tonnes grading 122 g/t Ag, 1.32% Pb, and 3.08% Zn and Inferred Resources totaling 7.96 million tonnes containing 123 g/t Ag, 1.41% Pb, and 2.66% Zn, as detailed in the Table below, which does not include any of the results of the Company's 2011 surface drilling program at the GC Project announced on January 17, 2012.

Resource Classification Tonnes Grade Contained Metal
    Ag (g/t) Pb % Zn % Ag (oz) Pb (t) Zn (t)
Measured 592,800 230 1.41 3.33 4,383,600 8,400 19,800
Indicated 7,038,700 113 1.31 3.06 25,571,800 92,500 215,500
Total 7,631,500 122 1.32 3.08 29,955,400 100,900 235,300
Inferred 7,959,800 123 1.41 2.66 31,477,300 112,500 211,900

Silver Equivalent formula, parameters and metal prices as for mineral reserves below
Inclusive of resources converted to mineral reserves
Lower cut-off grade, 100 g/t AgEq Recovered
Rounding of some figures may lead to minor discrepancies in some totals

Mineral Reserves: The PFS defined mineral reserves of 4.8 million tonnes in the Proven and Probable categories containing approximately 18.5 million oz. silver, 62,100 tonnes of lead, and 140,200 tonnes of zinc with a projected mine life of 12 years.

Category Mineral Reserve (t) Ag (g/t) Pb (%) Zn (%) Ag (oz) Pb (t) Zn (t) Ag. Eq. (g/t)*
Proven 464,000 199 1.12 3.18 2,968,000 5,180 14,750 268
Probable 4,285,700 113 1.33 2.93 15,510,000 56,910 125,480 212
Proven + Probable** 4,749,700 121 1.31 2.95 18,478,000 62,090 140,230 218

*Ag Eq (g/t) is the recovered silver equivalent using metal prices of US$18.00/ troy oz Ag, US$1.00/lb Pb, US$1.00/lb Zn and Recoveries of 62.78% Ag, 84.57% Pb and 88.42% Zn, and calculated using the formula AgEq Recovered = {Ag (g/t) * Ag ($/g) * Ag (Rec%)} / Ag ($/g) + {Pb (%) * Pb ($/lb) * Pb (Rec%) * 22.0462} / Ag  ($/g) + {Zn (%) * Zn ($/lb) * Zn (Rec%) * 22.0462} / Ag ($/g) **135 g/t Ag Eq cut-off for Stope Reserves & 45 g/t Ag Eq for Development Reserves. Rounding of some figures may lead to minor discrepancies in some totals.

Please refer to 2012 GC Technical Report prepared by AMC Mining Consultants (Canada) Ltd for further information on the Project.

Exploration

Exploration work by Silvercorp on the GC property was carried out in 2008. With that exploration program, Silvercorp had completed 10,083 m surface drilling in 22 holes, a comprehensive geological survey including soil geochemical survey, geological mapping, surface trenching and pitting. Added to previous exploration works, a total of 23,546 m surface drilling with 65 diamond holes were completed in GC property to date of 2008.

Since 2008, Silvercorp commenced intensive exploration programs targeting major vein structures (such as V28, V9W-2, V9-3, V2, V7, V10) with surface drilling, underground drilling and tunneling, which resulted in significant discovery of new mineralized veins and resources upgrading. Between 2009 to June of 2017, Silvercorp had completed approximate 281,600 m underground and surface drilling in 962 diamond holes and about 36 km tunneling exploration and underground development.

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