LM Mine

Introduction

Silvercorp acquired the LM silver-lead mine in November 2007.  Located directly southeast of the Ying mine (240 km southwest of Zhenzhou, the capital city of Henan Province in central China), the LM mine operates under a mining permit covering an area of 3.07 km².  Silvercorp commenced production at the mine in the March 2008.

Ownership (80%)

The LM property is owned 100% by Henan Huawei Mining Co. Ltd. (Henan Huawei), a sino-foreign cooperative JV company owned 80% by Silvercorp and 20% by Luoning Huatai Mining Development Co. Ltd. (a private company). Henan Huawei purchased the LM property in 2007 at an approximate cost of $3.25 million.

History

Mining and exploration activities began in 2005 and the LM mine was producing approx. 300 tonnes of ores per day by 2007.  No resource was estimated as the previous operator was only interested in mining any ore shoots found along the veins.  Most mining activities were focused on the high-grade ore shoots of just two veins, each close to 1 km in strike length.  

Geology

The LM mine area has 46 known mineralized veins. Many of these were discovered only recently in the 2010 exploration campaign. The veins are generally similar to those found throughout the Ying mining district, occurring as sets or systems of veins of similar orientation which are enclosed by steeply-dipping fault-fissure zones that extend for hundreds to a few thousand meters along strike. The veins are narrow, tabular or splayed, with rich mineralization often occurring in pockets or ―ore shoots‖ often having vertical and horizontal extents of several tens of meters or more. The mineralization consists mainly of galena (lead sulfide) with lesser amounts of sphalerite (zinc sulfide), chalcopyrite (copper sulfide) and sparse amounts of other metallic minerals. The metallic minerals occur as disseminations or massive accumulations in a gangue of quartz and carbonate minerals. Silver is present mostly as microscopic inclusions in the galena.

Mining

LM has been an operating mine for many years. Due to the dispersed nature of the veins, the workings are divided into two adjacent mining camps, Xigou (west) and Donggou (east). The Xigou camp consists of two combined adits, a blind shaft and blind decline development systems. The Donggou camp utilizes an adit and blind shaft system. The company will apply shrinkage stope and re-suing stope mining methods which it has used successfully in the past. All mining and development activities are completed by a mining contractor.

Concentrates are sold to smelters within Henan province, many located within 160 km of the mill. Payable prices are based on the 10-day average spot price on the Shanghai Metals Exchange less Value Added Tax and smelter charges.

Exploration

As of the date of the latest technical report, approximately 25,708 m of exploration tunnels together with 568 underground drill holes (130,887 m) and 29 surface drill holes (12,917 m) have been completed in the TLP and LM mine areas.

For the current fiscal year, Silvercorp has planned a 35,000 m surface and underground drilling program ($1.6 million) at LM, in addition to 14,356 m of tunnels, shafts, raises, declines & ramps ($4.3 million) planned for the HPG & LM mine areas combined.

Last updated October 7, 2011