Silvercorp acquired its flagship Ying silver-lead-zinc property in March 2004. Following two years of exploration and development, Silvercorp received its mining permit on March 31, 2006, and commenced commercial production the next day on April 1, 2006. The Ying (SGX) mine is the largest of three significant producing underground mining operations of Silvercorp's in the Ying Ag-Pb-Zn district. The Ying district is located 240 km southwest of Zhenzhou, the capital city of Henan Province in central China.
The SGX area, which includes a smaller satellite deposit, the HZG mine, is in the western part of the Ying district and is covered by one mining permit and three exploration permits, together totaling 58.26 sq. km. in size.
The Ying Project is 100% owned by Henan Found Mining Ltd., a sino-foreign cooperative JV company owned 77.5% by Silvercorp (through a wholly owned Chinese subsidiary) and 22.5% by the Henan Non-Ferrous Geological & Mineral Resources Co. Ltd. Silvercorp earned its full interest in December 2005 after contributing US$3.67-milllion to the joint venture company and paying US$1.5-million to the Chinese party. Henan Found operates under a 30-year business licence issued by the Chinese government and has been granted all necessary permits.
The Ying area has been mined intermittently 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. After Silvercorp acquired the project in 2004, a NI43-101 Technical Report was completed and defined silver resources of 8.3M ounces in the M&I category and 52.7M ounces in the inferred category with significant quantities of lead and zinc by-products.
The Ying mine area has a myriad of known mineralized veins - 27 total at SGX and 4 at HZG. The veins are generally similar to those found throughout the district, occurring as sets of veins of similar orientation enclosed by steeply-dipping fault-fissure zones which extend for hundreds to a few thousand meters along strike. In the SGX mine, approximately 27% of the material filling the veins is strongly mineralized, with the richest mineralization often occurring in pockets or "ore shoots" having vertical and horizontal lengths measured in several tens of meters or more and widths ranging from 0.4 to 3.0 m. The mineralization consists mainly of galena (lead sulfide) and sphalerite (zinc sulfide), with small amounts of pyrite (iron sulfide) and 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.
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Silver-lead-zinc ore is mined from numerous horizontal portals and stopes using both the shrinkage and re-suing mining methods. Ore is removed either by mechanized cars or by two-tonne tricycle trucks and unloaded into a nearby conveyor belt system at the mine site where both waste rock and direct-shipping ore are manually separated from lower grade ore. Power supply for the mine comes from major power grids and hydropower generating stations located adjacent to the property. All mining and development are completed by a mining contractor.
Both the high-grade ore and the waste are removed from the facility with a front end loader and the high-grade ore is hand sorted and directly shipped to smelters. Low-grade ore is stockpiled and taken to Silvercorp's central milling facility 15 km away to be turned into silver-lead and zinc concentrates. A quality control laboratory processes up to 100 samples per day using wet chemical analytical and Atomic Absorption Spectrophotometry methods.
Concentrates are sold to smelters within Henan province, many located within 160 km of the mill. Payable prices are based on a 10-day average spot price on the Shanghai Metals Exchange less Value Added Tax and smelter charges.
Exploration and delineation of the mineralized veins is done primarily from underground workings - tunnels, drifts, crosscuts and declines, typically about 2 x 2 m in size - and by extensive underground long-hole core drilling. Tunneling, typically at levels 40 to 50 m apart in elevation, is done along strike of the veins to define character and tenor of mineralization in the veins, and holes are drilled at 50-100 m spacings along strike to delimit extent of the veins at depth.
Each of Silvercorp's producing mine areas in the Ying District, have defined Ag-Pb-Zn resources and reserves that are currently large enough to support profitable operations for a decade or more. None of the mine areas, however, have as yet been fully explored or delimited, especially to the depths typical of many similar Ag-Pb-Zn mesothermal vein districts elsewhere in the world. Each mine area in the Ying District has a large number of already identified veins that have not been explored in detail, and exploration to date has been quite successful in discovering many new veins that have not been explored at all. There are also a number of promising outlying intermediate stage exploration target areas, any of which could well become future additional "fast-track" mining developments.
Last updated June 14, 2013