SVM.TO · 2020-08-31 12:00:00

News release

Corporate Updates

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 Based on Proven and Probable Mineral Reserves only, the Ying mine complex is a viable operation

with a projected Life of Mine (LOM) through to 2040, assuming a n average annual production rate of

approximately 6 million ounces of silver between fiscal 2021 and 2027, 5 million ounces between

2028 and 2033, 4 million ounces b etween 2034 and 2036, and 2.5 million ounces between 2037 and

2040. There is also the potential to extend the LOM beyond 2040 v i a f u r t h e r e x p l o r a t i o n a n d

development, particularly in areas with identified Inferred Resources.

 The results of the 2017‐2020 underground drilling program on th e Ying Property show that most of

the major mineralized vein structures are still open at depth and laterally.

 Based on the LOM production forecast and the metal price and other assumptions shown under

‘Economic Analysis’ below, a base ‐case, pre‐tax NPV of US$954M at a 5% discount rate is projected

(US$713M post‐tax). Over the LOM, 62% of the net revenue is projected to come from silver, 29%

from lead, 6% from zinc, and 2% from gold.

Mineral Resources

T h e M i n e r a l R e s o u r c e e s t i m a t e s f o r t h e S G X , H P G , L M W , a n d L M E de p o s i t s w e r e c a r r i e d o u t b y

independent Qualified Person, Rod Webster, MAusIMM, MAIG of AMC , who takes responsibility for these

estimates.

The Mineral Resource estimates for the TLP, HZG and DCG deposits were carried out by independent

Qualified Person, Simeon Robinson, P.Geo. of AMC, who takes responsibility for these estimates.

The December 2019 Mineral Resources were estimated using a bloc k modelling approach and

Datamine’s™ dynamic anisotropy application 1. Except for DCG, all grade estimation was completed using

ordinary kriging. DCG was estimated using inverse distance squared.

Resource estimates were made for a total of 311 mineralized vei n structures for the six active Ying mines,

and for the DCG Project that also is located on the Ying Property.

Additional geological sections in the Ying 2020 Technical Repor t were prepared by independent Qualified

Person Dr. Adrienne Ross, P.Geo. of AMC, who takes responsibility for those sections.

The Mineral Resources are reported above cut‐offs after applying a minimum practical extraction width of

0.3 m. Diluted grades were estimated for blocks with mineraliza tion widths less than 0.3 m by adding a

w a s t e e n v e l o p e w i t h z e r o g r a d e . C u t ‐ o f f g r a d e s a r e b a s e d o n i n situ values in silver equivalent (AgEq)

terms in grams per tonne and inco rporate mining, processing and shipping costs, and metallurgical

r e c o v e r i e s a n d p a y a b l e v a l u e s , p r o v i d e d b y S i l v e r c o r p f o r e a c h mine and reviewed by the QPs. AgEq

formulae by mine are shown in the footnotes of the table below.

The estimated Mineral Resources and metal content for the Ying Property as of December 31, 2019 are

detailed in Table 1 below.

1 Dynamic anisotropy re‐orientates the search ellipsoid for each estimated block based on the local orientation of the

mineralization.

Table 1. Ying Mining District ‐ Mineral Resources and metal con tent for silver, lead, zinc, and gold as of

December 31, 2019 (Inclusive of Mineral Reserves)

Au (koz) Ag (Moz) Pb (kt) Zn (kt)

Measured 3.29 - 313 6.19 3.12 - 33.08 203.6 102.5

Indicated 3.48 - 257 5.04 2.53 - 28.77 175.5 88.1

Measured + Indicated 6.77 - 284 5.60 2.82 - 61.86 379.1 190.6

Inferred 4.33 - 237 4.84 1.99 - 33.00 209.8 86.1

Measured 0.49 - 342 1.09 0.25 - 5.43 5.4 1.2

Indicated 0.60 - 274 0.70 0.15 - 5.29 4.2 0.9

Measured + Indicated 1.09 - 305 0.87 0.20 - 10.72 9.5 2.1

Inferred 0.97 - 250 0.78 0.18 - 7.77 7.5 1.7

Measured 0.88 1.17 93 3.74 1.43 33.3 2.64 33.1 12.6

Indicated 1.50 1.35 67 3.02 1.30 64.9 3.22 45.2 19.5

Measured + Indicated 2.38 1.28 77 3.29 1.35 98.2 5.87 78.3 32.1

Inferred 3.20 2.05 84 2.65 1.04 211.2 8.65 84.9 33.2

Measured 0.49 - 348 1.72 0.38 - 5.47 8.4 1.8

Indicated 1.18 - 282 1.62 0.44 - 10.69 19.1 5.1

Measured + Indicated 1.67 - 301 1.65 0.42 - 16.16 27.5 7.0

Inferred 1.79 - 222 1.73 0.39 - 12.75 30.9 6.9

Measured 0.74 - 330 3.13 0.28 - 7.87 23.2 2.1

Indicated 1.97 - 259 2.33 0.29 - 16.41 45.9 5.8

Measured + Indicated 2.71 - 278 2.55 0.29 - 24.29 69.1 7.9

Inferred 2.41 - 248 2.85 0.39 - 19.22 68.6 9.5

Measured 2.51 - 208 3.44 0.33 - 16.79 86.5 8.3

Indicated 2.92 - 165 2.74 0.32 - 15.48 79.9 9.2

Measured + Indicated 5.43 - 185 3.06 0.32 - 32.27 166.4 17.5

Inferred 5.48 - 157 2.64 0.25 - 27.70 144.7 13.7

M e a s u r e d -- - - - ---

Indicated 0.06 0.09 59 3.78 0.15 0.2 0.12 2.3 0.1

Measured + Indicated 0.06 0.09 59 3.78 0.15 0.2 0.12 2.3 0.1

Inferred 0.40 0.24 61 4.69 0.15 3.2 0.79 18.9 0.6

Measured 8.41 0.12 264 4.28 1.53 33.3 71.29 360.2 128.6

Indicated 11.71 0.17 212 3.18 1.10 65.1 79.98 372.1 128.7

Measured + Indicated 20.12 0.15 234 3.64 1.28 98.4 151.26 732.3 257.3

Inferred 18.58 0.36 184 3.04 0.82 214.4 109.87 565.3 151.8

LMW

TLP

Total

Zn (%)

Metal contained in Mineral Resources

SGX

HZG

HPG

LME

Mine Resource category Tonnes (Mt) Au (g/t) Ag (g/t) Pb (%)

DCG

Notes:

 Measured and Indicated Mineral Resources are inclusive of Mineral Resources from which Mineral Reserves are estimated.

 Metal prices: gold US$1250/troy oz, silver US$18/troy oz, lead US$0.95/lb, zinc US$1.10/lb.

 Exchange rate: RMB 6.90 : US$1.00.

 Mineral Resource reported 5 m below surface

 Veins factored to minimum extraction width of 0.3 m after estimation.

 Cut‐off grades: SGX 145 g/t AgEq; HZG 130 g/t AgEq; HPG 140 g/t AgEq; LME 120 g/t AgEq; LMW 155 g/t AgEq; TLP 130 g/t

AgEq; DCG 135 g/t AgEq.

 Silver equivalent formulas by mine:

 SGX=35.63*Pb%+22.45*Zn%+Ag g/t

 HZG=34.6*Pb%+Ag g/t

 HPG=36.84*Pb%+23.61*Zn%+62.87*Au g/t + Ag g/t

 LME=34.17*Pb%+11.92*Zn%+Ag g/t

 TLP=34.19*Pb%+Ag g/t

 LMW=35.06*Pb%+Ag g/t

 DCG=36.84*Pb% + 23.61*Zn + 62.87*Au g/t + Ag g/t

 Exclusive of mine production to December 31, 2019.

 Rounding of some figures may lead to minor discrepancies in totals.

A comparison of Mineral Resource estimates between June 30, 2016 and December 31, 2019 indicates

the following:

 Measured and Indicated tonnes have increased by 23% overall, while the Inferred tonnes have

increased by 78%.

 Measured and Indicated grades have decreased overall by between ‐2% and ‐6%. Inferred grades

decreased between ‐20% and ‐26% overall (both comparisons exclu ding gold as it is a very minor

contributor).

 The net result in the Measured and Indicated categories has been a n i n c r e a s e i n t h e c o n t a i n e d

silver of 18% and an increase in the contained lead of 16%. The increase in zinc content was 20%.

 The net result in the Inferred category has been an increase in the contained silver of 42% and a

significant increase in both the contained lead and zinc, with increases of 38% and 32%

respectively.

Reasons for the differences in grade, tonnes, and contained metal include Mineral Resource additions and

conversion to higher categories arising from drilling and level development, different cut‐off grades and

depletion due to mining. Additional channel and drillhole samples also became available between the two

estimates to extend the Mineral Resources along‐strike and down ‐dip, and allo wed changed

interpretation of the veins, given the greater degree of geological understanding.

Mineral Reserves

The Mineral Reserve estimation is based on the assumption that current stoping practices will continue to

be predominant at the Ying Property, namely cut and fill resuin g and shrinkage stoping, using hand‐held

drills and hand‐mucking within st opes, and loading to mine cars by rocker‐shovel or by hand. The largely

sub‐vertical veins, generally competent ground, reasonably regu lar vein width, and hand‐mining

techniques using short rounds, allows a significant degree of selectivity and control in the stoping process.

Minimum mining widths of 0.5 m for resuing and 1.0 m for shrink age are assumed. The QP has observed

the mining methods at the Ying property and considers the minim um extraction and mining width

assumptions to be reasonable. Mi nimum dilution assumptions are 0.10 m of total overbreak for a resuing

cut and 0.2 m of total overbreak for a shrinkage stope.

Mining dilution and recovery factors vary somewhat from mine to mine and with mining method. Average

Y i n g d i l u t i o n f a c t o r s h a v e b e e n estimated as 15% for resuing and 18% for shrinkage, while assumed

mining recovery factors are 95% for resuing stopes and 92% for shrinkage stopes.

For the total tonnage estimated as Ying Mineral Reserves, 49.7% is associated with resuing and 50.3%

with shrinkage.

The estimated Mineral Reserves and metal content for the Ying Pr o p e r t y a s o f D e c e m b e r 3 1 , 2 0 1 9 a r e

detailed in Table 2 below.

Table 2 Ying Property Mineral Reserve estimates and metal conte nt at December 31, 2019

Au (koz) Ag (Moz) Pb (kt) Zn (kt)

Proven 2.48 298 5.86 2.80 23.73 145.2 69.4

Probable 2.71 259 5.05 2.35 22.57 137.0 63.9

5.19 277 5.43 2.57 46.30 282.1 133.3

Proven 0.30 356 0.98 0.24 3.42 2.9 0.7

Probable 0.32 306 0.66 0.12 3.13 2.1 0.4

0.62 330 0.82 0.18 6.54 5.0 1.1

Proven 0.48 1.05 88 3.66 1.52 16 1.34 17.4 7.2

Probable 0.76 1.38 62 3.07 1.37 34 1.53 23.4 10.5

1.24 1.25 72 3.29 1.43 50 2.88 40.8 17.7

Proven 0.36 352 1.65 0.37 4.05 5.9 1.3

Probable 0.89 287 1.57 0.40 8.18 13.9 3.5

1.24 306 1.59 0.39 12.23 19.8 4.8

Proven 1.25 241 3.47 0.34 9.71 43.5 4.2

Probable 1.10 216 2.60 0.32 7.62 28.5 3.5

2.35 230 3.07 0.33 17.34 72.0 7.7

Proven 0.42 347 3.30 0.28 4.73 14.0 1.2

Probable 0.93 303 2.44 0.30 9.00 22.6 2.8

1.35 317 2.71 0.29 13.73 36.6 4.0

Proven 5.29 0.09 276 4.33 1.59 16 46.99 228.9 84.0

Probable 6.70 0.16 241 3.39 1.26 34 52.02 227.5 84.5

11.99 0.13 257 3.81 1.41 50 99.01 456.4 168.6

Total Proven & Probable

Mine Reserve

Category Mt Au (g/t) Zn (% )

Metal Contained in Mineral Reserves

SGX

Total Proven & Probable

HZG

Ag (g/t) Pb (% )

LMW

Total Proven & Probable

Ying Mine

Total Proven & Probable

HPG

Total Proven & Probable

LME

Total Proven & Probable

TLP

Total Proven & Probable

Notes to Mineral Reserve Statement:

 Cut‐off grades (Ag/Eq g/t): SGX – 235 Resuing, 205 Shrinkage; HZ G – 2 4 0 R e s u i n g , 2 1 0 S h r i n k a g e ; H P G – 2 3 5 R e s u i n g , 2 1 0

Shrinkage; LME ‐210 Resuing, 180 Shrinkage; TLP ‐ 240 Resuing, 215 Shrinkage; LMW ‐260 Resuing, 235 Shrinkage.

 S t o p e M a r g i n a l c u t ‐ o f f g r a d e s ( A g E q g / t ) : S G X – 2 1 5 R e s u i n g , 1 80 Shrinkage; HZG – 220 Resuing, 195 Shrinkage; HPG – 215

Resuing, 190 Shrinkage; LME – 180 Resuing, 150 Shrinkage; TLP ‐ 220 Resuing, 195 Shrinkage; LMW ‐230 Resuing, 205 Shrinkage.

 Development Ore cut‐off grades (AgEq g/t): SGX – 145; HZG – 150; HPG – 145; LME ‐ 120; TLP ‐ 150; LMW ‐ 165.

 Unplanned dilution (zero grade) assumed as 0.05m on each wall of a resuing stope and 0.10m on each wall of a shrinkage stope.

 Mining recovery factors assumed as 95% for resuing and 92% for shrinkage.

 Metal prices: gold US$1,250/troy oz, silver US$18/troy oz, lead US$0.95/lb, zinc US$1.10/lb.

 Processing recovery factors: SGX – 96.5% Ag, 97.8% Pb, 64.2% Zn ; HZG – 96.8% Ag, 95.2% Pb; HPG – 90.7% Au, 90.2% Ag, 94.4%

Pb, 63.1% Zn; LME – 96.9% Ag, 94.1% Pb, 34.2% Zn; TLP – 93.4% Ag, 90.7% Pb; LMW – 96.6% Ag, 96.3% Pb;

 Payables: Au – 81%; Ag – 90.0%; Pb – 87.5%; Zn – 72.5%.

 Exclusive of mine production to December 31, 2019.

 Exchange rate assumed is RMB 6.90 : US$1.00.

 Rounding of some figures may lead to minor discrepancies in totals.

The sensitivity of the Ying Mineral Reserves to variation in cu t‐off grade (COG) has been tested by

applying a 20% increase in COG to Mineral Reserves at each of t he Ying mines. The lowest sensitivities are

seen at SGX and LME with, for the entire Ying Property, an appr oximate 8.8% reduction in AgEq ounces

for a 20% COG increase, demonstrating relatively low overall COG sensitivity.

Total Ying Mineral Reserve tonnes are approximately 60% of Mineral Resource (Measured plus Indicated)

tonnes. Silver, lead, and zinc Mineral Reserve grades are 110%, 105% and 110% respectively of the

corresponding Measured plus Indicated Mineral Resource grades. Metal conversion percentages for

silver, lead, and zinc are 65%, 62%, and 66% respectively.

Some significant aspects of a comparison of Mineral Reserve est imates between June 30, 2016 (previous

Technical Report) and December 31, 2019 (Ying 2020 Technical Report) are the following:

 3% decrease in total (Proven + Probable) Ying Mineral Reserve tonnes.

 Increase in total Ying Mineral Reserve silver, lead, and zinc grades of 7%, 2%, and 11% respectively.

 Increase in total Ying Mineral Reserve metal content for silver and zinc of 4% and 8% respectively;

1% decrease in total lead content.

 SGX continues being the leading contributor to the total Ying Mineral Reserves, accounting for 43%

of tonnes, 47% of silver, 62% of lead, and 79% of zinc, compare d to respective values of 45%, 48%,

60%, and 83% in 2016.

 63% increase in total Mineral Reserve tonnes at HPG, with corre sponding increases in silver, lead

and zinc content of 23%, 50% and 103% respectively. Gold Mineral Reserves also increased from 27

koz to 50 koz at HPG.

 31% increase in total Mineral Reserve tonnes at LME, with corre sponding increases in silver, lead

and zinc content of 35%, 5% and 20% respectively.

 34% decrease in total Mineral Reserve tonnes at LMW, with corresponding decreases in silver, lead

and zinc content of 17%, 35% and 31% respectively.

 4% increase in total Mineral Reserve tonnes at HZG, with corres ponding increases in silver and zinc

content of 12% and 10% respectively; 2% decrease in total lead content.

 5 % d e c r e a s e i n t o t a l M i n e r a l R e s e r v e t o n n e s a t T L P , b u t w i t h i ncreases in both silver and zinc

content of 11%; 7% decrease in total lead content.

The Ying mine complex is a viable operation with a projected LO M through to 2040 based on only Proven

and Probable Mineral Reserves and assuming an average annual production rate of approximately 6

million ounces of silver between fiscal 2021 and 2027, 5 million ounces between 2028 and 2033, 4 million

ounces between 2034 an d 2036, and 2.5 millio n ounces between 20 37 and 2040. The potential exists for

an extended LOM via further exploration and development, partic ularly in areas with identified Inferred

Resources.

Economic Analysis

Although Ying is a producing property and therefore does not require an economic analysis for the

purposes of the Ying 2020 Technical Report, the Qualified Perso ns considered it reasonable to undertake

a summary‐level analysis to illustrate the potential economic impact relative to the latest Mineral Reserve

estimations and to the associated production schedules.

The following metal prices and exchange rate were used for the economic analysis: g old ‐ US$1,400/oz,

silver ‐ US$20/oz, lead ‐ US$0.95/lb, zinc ‐ US$1.10/lb; exchange rate ‐ 1US$ = 6.9RMB. Average costs used

were: mining ‐ $61.34/t; milling ‐ $10.23/t: shipping ‐ $3.92/t; Mineral Resources tax ‐ $6.86/t; G&A ‐

$8.30/t: government fees and other taxes ‐ $2.78/t; sustaining and growth capital ‐ $16.95/t.

Based on the LOM production forecast through to 2040 and the metal price and other assumptions shown

above, a base case pre‐tax NPV of US$954M at 5% discount rate i s projected (US$713M post‐tax). Over

the LOM, 62% of the net revenue is projected to come from silve r, 29% from lead, 6% from zinc, and 2%

from gold.

Qualified Persons

H . S m i t h , P . E n g . , A . R o s s , P . G e o . a n d S . R o b i n s o n , P . G e o . o f A MC Mining Consultants (Canada) Ltd.; R.

W e b s t e r , M A u s I M M , M A I G a n d R . C h esher, FAusIMM of AMC Consultan ts Pty Ltd.; and A. Riles,

MAusIMM, MAIG of Riles Integrated Resource Management Pty Ltd a re Qualified Persons as defined by

National Instrument 43‐101. The Qualified Persons have reviewed and consented to this press release and

believe it fairly and accurately represents the information in the Technical Report that supports the

disclosure.

About Silvercorp

Silvercorp is a profitable Canad ian mining company producing si lver, lead and zinc metals in concentrates

f r o m m i n e s i n C h i n a . T h e C o m p a n y ’ s g o a l i s t o c o n t i n u o u s l y c r e ate healthy returns to shareholders

through efficient management, organic growth and the acquisitio n of profitable projects. Silvercorp

balances profitability, social an d environmental relationships, employees’ wellbeing, and sustainable

development. For more information, please visit our website at www.silvercorp.ca.

For further information

Silvercorp Metals Inc.

Lon Shaver

Vice President

Phone: (604) 669‐9397

Toll Free 1(888) 224‐1881

Email: [email protected]

Website: www.silvercorp.ca

CAUTIONARY DISCLAIMER ‐ FORWARD‐LOOKING STATEMENTS

Certain of the statements and information in this news release constitute “forward‐looking statements” within the

meaning of the United States Private Securities Litigation Reform Act of 1995 and “forward‐looking information”

within the meaning of applicable Canadian provincial securities laws (collectively, “forward‐looking statements”). Any

statements or information that express or involve discussions w ith respect to predictions, expectations, beliefs, plans,

projections, objectives, assumpt ions or future events or perfor mance (often, but not always, using words or phrases

such as “expects”, “is expected”, “anticipates”, “believes”, “plans”, “projects”, “estimates”, “assumes”, “intends”,

“strategies”, “targets”, “goals” , “forecasts”, “objectives”, “b udgets”, “schedules”, “potential” or variations thereof or

stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be

achieved, or the negative of any of these terms and similar exp ressions) are not statement s of historical fact and may

be forward‐looking statements. Forward‐looking statements relate to, among other things: the price of silver and

other metals; foreign exchange ra tes; the accuracy of mineral r esource and mineral reserve estimates at the

Company’s material properties; the sufficiency of the Company’s capital to finance the Company’s operations;

estimates of revenues, operation costs, capital expenditures, m ine plan, and estimated production from the

Company’s mines in the Ying Mining District; timing of receipt of permits and regulatory approvals; availability of

funds from production to finance the Company’s operations; and access to and availability of funding for future

construction, use of proceeds from any financing and development of the Company’s properties.

Forward‐looking statements are subject to a variety of known an d unknown risks, uncertainties and other factors that

could cause actual events or res ults to differ from those refle cted in the forward‐looking statements, including,

without limitation, risks relating to: global economic and socia l i m p a c t o f C O V I D ‐ 1 9 ; f l u c t u a t i n g c o m m o d i t y p r i c e s ;

calculation of resources, reserves and mineralization and preci ous and base metal recovery; interpretations and

assumptions of mineral resource and mineral reserve estimates; exploration and development programs; feasibility

and engineering reports; permits and licences; title to properties; property interests; joint venture partners; acquisition

of commercially mineable minera l rights; financing; recent mark et events and conditions; economic factors affecting

the Company; timing, estimated amount, capital and operating ex penditures and economic returns of future

production; integration of future acquisitions into the Company’s existing operations; competition; operations and

political conditions; regulator y environment in China and Canad a; environmental risks; foreign exchange rate

fluctuations; insurance; risks and hazards of mining operations; key personnel; conflicts of interest; dependence on

management; internal control over financial reporting; and bringing actions and enforcing judgments under U.S.

securities laws.

This list is not exhaustive of the factors that may affect any of the Company’s forward‐looking statements. Forward‐

looking statements are statements about the future and are inherently uncertain, and actual achievements of the

Company or other future events or conditions may differ materia lly from those reflected in the forward‐looking

statements due to a variety of risks, uncertainties and other f actors, including, without limitation, those referred to in

the Company’s Annual Information Form under the heading “Risk F actors”. Although the Company has attempted to

identify important factors that could cause actual results to d iffer materially, there may be other factors that cause

results not to be as anticipated, estimated, described or intended. Accordingly, readers should not place undue

reliance on forward‐looking statements.

The Company’s forward‐looking statements are based on the assum ptions, beliefs, expectations and opinions of

management as of the date of this news release, and other than as required by applicable securities laws, the

Company does not assume any obligation to update forward‐looking statements if circumstances or management’s

assumptions, beliefs, expectations or opinions should change, o r changes in any other events affecting such

statements. For the reasons set forth above, investors should not place undue reliance on forward‐looking statements.

CAUTIONARY NOTE TO US INVESTORS

This news release has been prepar ed in accordance with the requ irements of NI 43‐101 and the Canadian Institute of

Mining, Metallurgy and Petroleum Definition Standards, which di ffer from the requirements of U.S. Securities laws. NI

43‐101 is a rule developed by t he Canadian Securities Administr ators that establishes standards for all public

disclosure an issuer makes of scientific and technical information concerning mineral projects.

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