Silvercorp acquired the Silvertip silver-lead-zinc project, located in northern British Columbia, Canada, just south of the Yukon/BC border, in February 2010. The project, which is accessible by a 25 km road from the Alaska Highway, has undergone a number of surface and underground drill programs and geophysical surveys since 1955 and is in the advanced exploration stage. Upon acquisition, the project covered approximately 216 km2 in 63 contiguous claims and 26 fractional claims. Silvercorp has since staked further land around the project, growing its size to over 200 claims covering over 800 km2.
The Silvertip project is 100% owned by Silvercorp. It was purchased from Silver Standard in February 2010 for a total consideration of CAD$15 million, paid 50% in cash ($7.5 million) and 50% in common shares of Silvercorp.
Since the discovery of an argentiferous galena outcropping on Silvertip Hill in 1955, over $40 million in exploration work has been carried out by various owners/operators on the project up until 2002. This work includes 2,400 metres of underground tunnel development and 71,472 metres of surface and underground drilling in 491 holes.
A resource estimate was first calculated on the Silvertip project in 1997, which was then converted into an NI43-101 compliant resource in October 2002 by Imperial Metals Corporation, which owned the project from 1996 to 2002. However, the 2002 resource report did not include exploration results from a 1999-2000 drill campaign carried out by Imperial Metals, during which drill hole SSD-99-65 intercepted 31.4 meters grading 318.4 g/t silver, 5.52% lead and 8.65% zinc. A subsequent 22-hole drill program during the winter of 2000 delineated the high-grade "65 Zone". Consequently, Silvercorp compiled an updated NI 43-101 technical report in February 2010 which includes the "65 Zone". Please see resource section below.
Geology & Mineralization
The Silvertip property is situated in the northern Omineca Belt of the Canadian Cordillera with the most important element of this region being the Cassiar terrane. The main mineral deposits are syngenetic barite +/- lead, zinc prospects in Paleozoic sediments, and skarn and replacement deposits related to Cretaceous intrusive and hydrothermal activity.
Mineralization on the property is interpreted as a silver rich, polymetallic manto style deposit representing the distal portions of a larger Carbonate Replacement Deposit (CRD) system. The mineralization textures imply several phases of fluid input, producing a combination of intra-mineral replacement, hydrothermal solution, and brecciation. These features are typical of large and well-developed CRDs, and the potential exists to substantially increase resource tonnage by tracing the manto mineralization back through the system to the major chimneys that fed them. This has historically been the experience in such deposits as Santa Eulalia in northern Mexico (30 million tonnes). Based on the deposit model, it is anticipated that higher grade feeder zones or 'chimneys' may be present in the immediate vicinity of the more planar manto (cape like) deposit.
For more information, please Click here to view technical report.
Silvercorp intends to prepare and submit an application for a Small Mine Permit (which allows for an operation with a capacity of under 75,000 tonnes per year). Once permitted, Silvercorp plans to start mining high grade pockets (>1,000 g/t silver equivalent cut-off grades) which are already accessible from existing tunnels. The cash flows to be generated from these early operations will then be used by Silvercorp to carry out more drilling to increase resources and potentially extend the mine life. Advancing to production will provide benefits to the local community through profit sharing, business opportunities, and to government through tax payment. This strategy has been carried out with significant success at Silvercorp's Ying Mining District in China.
In November 2012, Silvercorp received an independent Preliminary Assessment ("PA") Technical Report prepared by Golder Associates Ltd which was an update to previous PA received in February 2011. Based on the new PA, a 500 tonne per day (“tpd”) seasonal operation (expanding to a 1,000 tpd year-round operation in the third year of mining), is the best option for the development of the Silvertip project. This project would have a 13-year mine life under this development scenario, based on currently defined indicated and inferred resources. Please see Table 1 below for further information.
|Silver price (US$/oz)
|Lead price (US$/lb)
|Zinc price (US$/lb)
|Pre-tax NPV 8% (US$ million)
|Mine life (years)
|Years 1-5 average annual cash flow (US$ million, NPV 8%)
The PA is based on an underground mine operation using a drift and fill mining method, tailings dam, processing and concentrate production facility. For further information, please click here to view the Silvertip Preliminary Assessment.
In 2011, Silvercorp began an analysis of the silver, lead, and zinc rich exhalite mineralization (SedEx style deposit) hosted in the overlying sedimentary layers. The deposit occurs as a series of overlapping pods of silver, lead, and zinc rich mineralization. These pods vary from 4.5 to 23.8m at their thickest points. Average thickness is 10.5 m. Depth below surface varies from outcropping to more than 200 m moving eastward from the existing mine portal. Distribution of exhalite layers is open to the east, south and north, with holes located up to 1.5 km south of the portal still encountering exhalite and holes 400 m north of the portal, collared within Earn Group sediments encountering exhalite. Drillhole 97-4 completed in 1997, which intercepted 11.06 m grading 211.46 g/t Ag, 4.02% Pb, 9.63% Zn (670.83 g/t Ag Eq.), was made at a depth of only 17.9m below surface adjacent to the portal.
A 5,000m drill program has been initiated to further test the exhalite distribution and grade, and explore for satellite mineralization around the known deposit based on strong geophysical anomalies. Drilling of the exhalite layer is focused on the vicinity of drill hole 97-4 to further explore the extension of the high grade exhalite layer.
In addition, Silvercorp is exploring a new zone (termed the DM Zone) of a silver-lead-zinc mineralization approximately 8 km to the south. This new zone was mapped out to occur along the same lithological contact between the limestones and shales that hosts the Silvertip deposit. The semi-oxidized mineralization along the shale/limestone contact has been traced over 500m along strike and one of the best results is a 1.5mchipping sample grading 175 g/t Ag, 5.77% Pb and 1.0% Zn. Drilling at the DM zone will test down dip extent of this mineralization and along the strike extension. Two surface drill rigs have been employed to complete the drill program.
In 2010, Silvercorp completed a total of 10,913 metres of drilling from 36 holes. The 2010 drilling program successfully defined and updated the silver-lead-zinc resources on extensions to the east and south of the main ore body. Silvercorp also conducted a 4,113 line kilometers VTEM airborne geophysical survey over an area of 367 square kilometres and completed certain studies and reports required for a B.C. Small Mine Permit application.
Randal Cullen, a non-independent Qualified Person, and a consultant to Silvercorp Metals Inc. has approved the written disclosure.
Last updated December 3, 2012