Ying Mining District Overview

History

Located in the central province of Henan in China, the Ying Mining District has been intermittently mined over the last several hundred years by small-scale local miners. Since 1956, extensive geological mapping, airborne magnetic surveys, stream sediment geochemical surveys, local IP surveys and trenching were conducted in the area by provincial geological bureau teams, culminating in the establishment of resource estimates in late 2003. 

In March 2004, Silvercorp acquired its flagship Ying silver-lead-zinc project, and has subsequently acquired three other adjacent projects (the HPG, TLP and LM mines) in 2007, consolidating its hold on the district.  Silvercorp’s Ying Mining District now includes eight exploration permits totalling 59.7 km2 and mining permits covering 16.86 km2.  The district is located near the county of Luoning approximately 240 km southwest of Zhenzhou, the capital city of Henan Province.

Ownership

Silvercorp’s four mines in the Ying Mining District are held in two Sino-Foreign Cooperative Joint Venture companies.  The flagship Ying Mine and the TLP Mine are held by Henan Found Mining Ltd., owned 77.5% by Silvercorp and 22.5% by the Henan Non-Ferrous Geological & Mineral Resources Co. Ltd. (the local  quasi-government owned geological bureau). 

The HPG Mine and the LM Mine are held by Henan Huawei Mining Co. Ltd., a Sino-Foreign Cooperative JV company owned 70% by Silvercorp and 30% by Luoning Huatai Mining Development Co. Ltd. (a private company).

Mineral Processing – Silvercorp’s Mills

Silvercorp owns and operates two flotation mills in the Ying Mining District. The first mill, with a capacity of 1,000 tonnes per day (tpd), was built in 2006 at a capital cost of $6 million and is currently processing ore from the Ying mine. The second mill, completed in December 2008, has a capacity of 1,500 tpd and cost $12 million to build. Both are located 15 km by paved road from Silvercorp’s mines and are supplied with power from the Henan Province power grid.

The processes used in the mills are typical of polymetallic Pb-Zn ores. There are two stages of ore crushing, from 400 mm to 15 mm, followed by ball milling such that 70% of the material passes 200 mesh (74 microns). The minerals are then separated by a series of flotation circuits, producing a lead concentrate (carrying the silver) which averages 69% lead, and a zinc concentrate which averages 52% zinc. A quality control laboratory processes up to 100 samples per day using wet chemical analytical and Atomic Absorption Spectrophotometry methods.

The concentrates are of premium quality, containing very little arsenic (less than 0.001%) or other penalty elements. Metal recoveries to date have averaged over 96% for lead, 93% for silver and 76% for zinc. The silver and lead recoveries exceed those expected from the design specifications. The concentrates are currently being transported via trucks to custom smelters located 70 to 190 km from the mill site.

Regional Geology

The Ying Mining district lies in the Quinling Orogenic belt formed when the Yangtze and the Northern China Plate collided in the Palaeozoic period. The tectonic collision resulted in a number of deep seated structural thrust faults and shears which provides a host for most of the mineralizing event. The structural event has resulted in widespread silver, lead and zinc mineralization as well as gold in some areas.  The rich belt has been traced over 300 km where the brittle fracturing of the Achaean aged gneissic host rocks has provided well defined path ways for mineralizing fluids. Although high grade mineralization has been known for hundreds of years, many areas remain under explored and untested. For more information, please see the 2010 Ying NI 43-101 Technical Report by clicking here.

Production Summary

Fiscal Year ends March 31st

Mine Production Outlook

For FY2011, Silvercorp expects to grow its silver production by 13% at the camp to produce approximately 500,000 tonnes of ore at forecasted grades of 360 g/t silver, 8% lead and 1.2% zinc.  This would yield approximately 5.3 million ounces of silver, 83.7 million pounds of lead and 10.3 million pounds of zinc.  Capital expenditures for FY2011 is projected to be $13 million for the entire camp.
 

Mineral Reserves/Resources 

* Based on Ying Mining District Technical Report filed February 2010; GC Technical Report from June 2009; and Silvertip Technical Report from February 2010. Ag equivalent for Ying District is calculated based on US$6.50/oz Ag, $0.40/lb Pb and $0.45/lb Zn.  Ag equivalent for GC project is calculated based on US$12/oz Ag, $0.75/lb Pb and $0.75/lb Zn.  Ag Equivalent at Silvertip is calculated using metal prices of US$12.13/oz Ag, US$728/oz Au, US$0.804/lb Pb and US$0.847/lb Zn and metal recoveries of 69.2% for silver, 80.4% for lead, 84.7% for zinc and 50% gold.