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Message: Technical Report Completed on the TLP-LM Project, Henan Province, China
| December 18, 2008 | ||
| Silvercorp Metals Inc.: Technical Report Completed on the TLP-LM Project, Henan Province, China | ||
|
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 18, 2008) - Silvercorp Metals Inc. ("Silvercorp" or "the Company") (TSX:SVM), China's largest primary silver producer, is pleased to report that a new National Instrument ("NI") 43-101 Technical Report on the TLP-LM project in the Ying Mining District of Central China dated November 20, 2008 (the "Technical Report"), has been completed and is available for review on the SEDAR system or on the Company's website at www.silvercorp.ca. The Technical Report and Pre-Feasibility Study of the TLP and LM projects is based on the development and exploration work completed by the Company from December 2007 to August 31, 2008. The Technical Report is authored by Chris Broili, C.P. Geo., L.P. Geo., and Mel Klohn, L.P. Geo., both of BK Exploration Associates; and Ron Moran, P.Eng., of Vetrin Mine Planners. The authors are independent Qualified Persons as defined by National Instrument 43-101. Silvercorp is exploring and developing the TLP property through its 77.5%-owned joint venture company, Henan Found Mining Ltd., which acquired 100% ownership of the property in December 2007. The Company is exploring and developing the adjacent LM property through its 70%-owned joint venture company, Henan Huawei Mining Co. Ltd., which acquired 100% ownership of the LM property in November 2007. The following are highlights from the report: From December 2007 to August 31, 2008, Silvercorp completed a total of 21,307 m of tunnels, tunnel enlarging, drifts, declines, raises or shafts, and 25,744 m of underground and surface drilling on the TLP and LM properties. Channel sampling, exposures in underground tunnels and underground drilling have defined sulfide-bearing veins containing silver-lead-zinc mineral resources that are quantified in the Technical Report. The mineralization identified to date at TLP occurs in 11 discrete tabular quartz-ankerite veins consisting of massive sulfide zones averaging 1.56 m in width. At LM, the mineralization occurs in 14 quartz-veins with massive sulfide zones averaging approximately 0.71 m in width. The TLP-LM project area is crossed by numerous mineralized structures. To date, at least 25 major vein structures have been mapped in detail and an equal number of smaller vein structures have been identified but not yet examined in detail. Mineralization in the veins consists of silver-bearing galena and freibergite accompanied by some sphalerite, chalcopyrite and small amounts of pyrite. Much of the galena occurs as massive lenses of sheared granular steely material, up to one meter thick and 100 m or more in vertical and horizontal dimensions. The gangue consists mostly of fine-grained silica with ankerite. The mineralization in the TLP-LM project, as in the Coeur d'Alene District (Idaho, USA), shows evidence of changes both laterally and to depth in character and contained metal ratios, probably a result of district-scale zonation. Mineral Resources The current estimated mineral resources (at a 50 g/t Ag-equivalent cutoff) of the veins defined at the TLP and LM mines are as follows: Average Grade
--------------------------------
Ag
Resource Width Ag Ag Pb equiv.
Mine Category (m) Tonnes g/t oz/t % g/t
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Measured 1.54 910,811 119 3.82 2.86 239.45
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Indicated 1.56 3,247,978 145 4.66 2.17 236.29
TLP --------------------------------------------------------------
Meas+Ind 1.56 4,158,789 139 4.48 2.32 236.98
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Inferred 1.49 2,708,161 143 4.59 2.40 243.76
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Measured 0.64 118,397 254 8.17 2.17 345.6
--------------------------------------------------------------
Indicated 0.75 244,077 256 8.23 2.08 343.87
LM --------------------------------------------------------------
Meas+Ind 0.71 362,474 255 8.21 2.11 344.43
--------------------------------------------------------------
Inferred 0.57 106,531 238 7.67 2.93 362.07
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Contained Metal
--------------------------------
Silver
equiv.
Resource Width Ag Pb ounces
Mine Category (m) Tonnes ounces tonnes (i)
----------------------------------------------------------------------
Measured 1.54 910,811 3,483,248 26,009 7,226,666
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Indicated 1.56 3,247,978 15,132,435 70,334 25,207,201
TLP --------------------------------------------------------------
Meas+Ind 1.56 4,158,789 18,615,683 96,343 32,433,867
--------------------------------------------------------------
Inferred 1.49 2,708,161 12,417,352 64,910 21,693,963
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----------------------------------------------------------------------
Measured 0.64 118,397 967,327 2,567 1,354,959
--------------------------------------------------------------
Indicated 0.75 244,077 2,009,885 5,075 2,797,058
LM --------------------------------------------------------------
Meas+Ind 0.71 362,474 2,977,213 7,642 4,152,018
--------------------------------------------------------------
Inferred 0.57 106,531 816,572 3,122 1,274,891
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(i) Ag Equivalent is calculated using US$6.50/oz Ag, US$0.40/lb Pb and
US$0.45/lb Zn. Calculations reflect gross metal content and have
not been adjusted for metallurgical recoveries.
Based on a five-year mine plan (years 2009 to 2013) developed in the accompanying prefeasibility study portion of the Technical Report, the TLP mine is expected to produce a total of 1,596,000 tonnes with an average grade of 212 g/t Ag and 2.67% Pb. The LM mine will produce 268,160 tonnes with an average grade of 316 g/t Ag and 2.14% Pb. The production projection is based on Measured and Indicated mineral resources using the 150 g/t Ag equivalent cutoff with 80 to 85% mining recovery rates and 20 to 70% dilution factors. After 6,600 m of mine development at a cost of US$2,105,447, the TLP and LM mines can ramp-up and sustain production of over 1,000 and 150 tonnes per day, respectively. A breakdown of the production schedule is as follows: Five-year Production Summary for the TLP and LM Mines
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TLP Mine LM Mine
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Year Tonnes Ag (g/t) Pb (%) Tonnes Ag (g/t) Pb (%)
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2009 252,000 163 2.71 44,520 338 1.68
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2010 336,000 202 2.64 52,080 385 1.78
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2011 336,000 216 2.78 51,149 323 2.23
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2012 336,000 242 2.58 57,660 261 3.05
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2013 336,000 225 2.64 62,571 289 1.85
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Total 1,596,000 212 2.67 268,160 316 2.14
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If revenue from lead is used to cover production cost, then averaging unit silver production cost adjusted for lead credit is projected to be US$3.41/oz for the TLP mine and US$2.62/oz for the LM mine. If lead is treated as free credits and only silver revenue is used to cover the production cost, then the averaging unit silver production costs for the TLP and LM mines are projected to be US$7.51/oz and US$4.98/oz, respectively. Net cash flow generated from production over the five-year mine plan is expected to be US$26,702,379 for 100% of the TLP mine and US$7,665,749 for 100% of the LM mine. Payback Capital expenditures of US$8,835,447, including mine development and ongoing programs, is budgeted for the TLP-LM project. The payback period for TLP-LM is approximately one and a half years. Michael Hibbitts, P.Geo., Silvercorp's V.P. Operations, is the Company's Qualified Person on the project under NI 43-101 and has reviewed and given consent to the press release. |
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