Silvercorp Reports 15%, 21% and 22% Increases IN Proven and Probable Mineral Reserves FOR Silver, Lead and Zinc Metal Contents Respectively, Following 14.5 Million Ounces of Silver Production Between July 2013 and June 2016 at the Ying Silver-Lead-Zinc Mining District
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PRESS RELEASE
Trading Symbol: TSX: SVM
SILVERCORP REPORTS 15%, 21% AND 22% INCREASES IN PROVEN AND PROBABLE
MINERAL RESERVES FOR SILVER, LEAD AND ZINC METAL CONTENTS RESPECTIVELY,
FOLLOWING 14.5 MILLION OUNCES OF SILVER PRODUCTION BETWEEN JULY 2013 AND
JUNE 2016 AT THE YING SILVER-LEAD-ZINC MINING DISTRICT
VANCOUVER, British Columbia – February 22, 2017 – Silvercorp Metals Inc. (“Silvercorp” or the
“Company”) is pleased to report the results of an updated National Instrument (“NI”) 43 -101
Technical Report with an effective date of December 31 2016 (Mineral Resources and Mineral
Reserves effective June 30 2016), prepared by AMC Mining Consultants (Canada) Ltd. (“AMC”)
covering the SGX, HZG, HPG, TLP, LME, and LMW underground mines on the Ying silver-lead-zinc
property in Henan Province, China (the “Ying 2017 Technical Report”).
The four authors of the Ying 2017 Technical Report all qualify as independent Qualified Persons.
Three of the authors visited the Ying Property in July 2016. AMC examined all aspe cts of the
project, including drill core, exploration sites, underground workings, processing plant and
surface infrastructure. The Ying 2017 Technical Report, with a completion date of February 15,
2017, will be made available for review on the SEDAR syst em and on the Company’s website at
www.silvercorp.ca in due course.
The Mineral Resource estimates for the Ying property were made by independent Qualified
Person, Dr. Adrienne Ross, P.Geo using Datamine 3-D software.
Highlights of the Ying 2017 Technical Report
Defined Mineral Reserves of 12.30 million tonnes in the Proven and Probable categories
grading 240 grams per tonne (g/t) silver ( Ag), 0.07 g/t gold ( Au), 3.75% lead ( Pb), and
1.27% zinc (Zn), containing 95.02 million oz silver, 27,270 oz gold, 460, 960 tonnes lead,
and 155,690 tonnes zinc. In comparison with the 2014 Technical Report (Mineral Reserves
effective date of June 30, 2013), the increase in total Ying Mineral Reserve metal contents
for silver, lead and zinc is 15%, 21% and 22% respectively. This increase is on top of 14.5
million ounces of silver production between July 2013 and June 2016.
Based on Proven and Probable Reserves only, the Ying mine complex is a viable operation
with a projected Life of Mine (LOM) through to 2036, assuming an average annual
production rate of approximately 6 million ounces of silver between 2017 and 2025,
approximately 4.5 million ounces between 2026 and 2030, and approximately 2 .4 million
ounces between 2031 and 2036. It also has the potential to extend the LOM beyond 2036,
via further exploration and development, particularly in areas of Inferred Resources.
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Reported Mineral Resources of 16.31 million tonnes (inclusive of Mineral Reserves) in the
Measured and Indicated categories grading 245 g/t Ag, 0.09 g/t Au, 3.87% Pb, and 1.31%
Zn, containing 128.31 million ounces (oz) silver, 47,000 oz gold, 630,600 tonnes lead, and
214,350 tonnes zinc.
For Measured plus Indicated Resources, tonnes have increased by 16%, grades have
increased by between 3% and 7%, and cont ained metal has increased by 20% for silver,
23% for lead and 24% for zinc.
For Inferred Resources, tonnes have increased by 39%, silver grades have decreased by
8%, lead grades have increased by 20%, zinc grades have increased by 11%, and contained
metal has increased by 28% for silver, 67% for lead and 54% for zinc.
The results of the 2013-2016 underground drilling program on the 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 at 8% discount rate of $714M is
projected ($535M post-tax). Over the LOM, 63.1% of the net revenue is projected to come
from silver, 31.4% from lead and 5.5% from zinc.
2017 Mineral Resource and Mineral Reserve Summary
The last independent Mineral Resource estimate on the property had an effective date of June
30, 2013. Since that time, from July 1, 2013 to June 30, 2016, Silvercorp drilled 855 underground
holes and 41 surface holes, for a total of approximately 225,000 m. Most drill core is NQ -sized.
Other than drilling, the projects have been explored primarily from underground workings. The
workings follow vein structures along str ike, on levels spaced approximately 40 m apart.
Channel chip samples across the structures are collected at 5 m spacing. From July 1, 2013 to
June 30, 2016, Silvercorp undertook 128 km of tunnelling, and collected approximately 44,000
channel/chip samples
Mineral Resources:
The Mineral Resource estimates for the Ying property were prepared by independent Qualified
Person, Dr. Adrienne Ross, P.Geo, with the assistance of Ms. Kathy Zunica of AMC and with input
from Mr. Pat Stephenson, P.Geo , who takes QP responsibility for the additional geological
sections in the 2017 Technical Report . Datamine software was used, and, as a result of a
recommendation in AMC’s 2012 Technical Report, the June 2016 Resources were estimated
using a block modelling approach, with 3D ordinary kriging and Datamine’s™ dynamic
anisotropy application 1. Resource estimates were made for a total of 19 4 mineralized vein
structures for the six active mines of the Ying property.
The Mineral Resources are reported above cut -offs after applyin g a minimum practical
extraction width of 0.3 m. Diluted grades were estimated for blocks with mineralization widths
less than 0.3 m by adding a waste envelope with zero grade. Cut -off grades are based on in situ
values in silver equivalent (AgEq) terms in grams per tonne and incorporate mining, processing ,
shipping and general & administration (G & A) costs provided by Silvercorp for each mine and
reviewed by AMC.
1 Dynamic anisotropy re-orientates the search ellipsoid for each estimated block based on the local
orientation of the mineralization
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The estimated Mineral Resources and metal content for the property as of June 30, 2016 are
detailed in Table 1 below.
Table 1. Ying Mining District - Measured & Indicated, and Inferred Mineral Resources
(Inclusive of Mineral Reserves)
Mine Resource Category Tonnes
(Mt)
Au
(g/t)
Ag
(g/t) Pb (%) Zn (%)
Metal Contained in Resource
Au
(koz)
Ag
(Moz) Pb (kt) Zn (kt)
SGX
Measured 2.67 - 296 5.71 3.06 - 25.46 152.7 81.71
Indicated 3.86 - 271 5.06 2.36 - 33.64 195.5 91.19
Measured + Indicated 6.54 - 281 5.33 2.64 - 59.10 348.2 172.90
Inferred 3.66 - 268 5.14 2.33 - 31.50 187.8 85.23
HZG
Measured 0.33 - 390 1.20 0.24 - 4.14 4.0 0.78
Indicated 0.45 - 297 0.91 0.18 - 4.27 4.1 0.80
Measured + Indicated 0.78 - 336 1.03 0.20 - 8.41 8.0 1.58
Inferred 0.35 - 231 1.22 0.25 - 2.63 4.3 0.87
HPG
Measured 0.69 1.10 88 3.77 1.15 24 1.95 26.0 7.92
Indicated 0.63 1.10 85 2.84 1.15 22 1.72 17.9 7.21
Measured + Indicated 1.32 1.10 87 3.33 1.15 47 3.66 43.8 15.12
Inferred 1.01 1.21 114 3.88 1.09 39 3.69 39.1 10.98
LME
Measured 0.32 - 348 1.64 0.31 - 3.55 5.2 1.0
Indicated 0.93 - 312 2.19 0.49 - 9.33 20.3 4.51
Measured + Indicated 1.25 - 321 2.05 0.44 - 12.88 25.5 5.51
Inferred 0.65 - 326 1.60 0.42 - 6.79 10.3 2.73
LMW
Measured 0.54 - 329 3.44 0.27 - 5.74 18.7 1.49
Indicated 1.93 - 239 2.68 0.31 - 14.84 51.7 6.00
Measured + Indicated 2.47 - 259 2.85 0.30 - 20.58 70.4 7.49
Inferred 1.36 - 250 2.37 0.32 - 10.95 32.2 4.38
TLP
Measured 1.36 - 222 3.76 0.28 - 9.71 51.1 3.80
Indicated 2.60 - 167 3.21 0.31 - 13.97 83.5 7.94
Measured + Indicated 3.96 - 186 3.40 0.30 - 23.68 134.6 11.74
Inferred 3.44 - 196 3.95 0.32 - 21.69 135.6 11.04
Total
Measured 5.91 0.13 266 4.36 1.64 24 50.55 257.6 96.69
Indicated 10.40 0.07 233 3.59 1.13 22 77.76 373.0 117.66
Measured + Indicated 16.31 0.09 245 3.87 1.31 47 128.31 630.6 214.35
Inferred 10.47 0.12 230 3.91 1.10 39 77.25 409.4 115.22
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$19/troy oz, lead US$0.90/lb, zinc US$1.00/lb
Exchange rate: RMB 6.50 : US$1.00
Veins factored to minimum extraction width of 0.3 m
Cut-off grades: SGX 140 g/t AgEq; HZG 125 g/t AgEq; HPG 125 g/t AgEq; LME 125 g/t AgEq; LMW 130 g/t AgEq TLP 120 g/t AgEq
Silver equivalent formulas by mine:
SGX=33.1895*Pb%+23.4590*Zn%+Ag g/t; HZG=31.8736*Pb%+Ag g/t;
HPG=33.9925*Pb%+18.3181*Zn%+55.4773*Au g/t+Ag g/t; LME=34.0436*Pb%+Ag g/t;
TLP=34.1401*Pb%+Ag g/t; LMW=34.6856*Pb%+Ag g/t;
Exclusive of mine production to 30 June 2016
Rounding of some figures may lead to minor discrepancies in totals
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A comparison of Mineral Resource estimates between June 30, 2013 and June 30, 2016
indicates the following:
For Measured plus Indicated Resources, tonnes have increased by 16%, grades have
increased by between 3% and 7%, and contained metal has increased by 20% for silver,
23% for lead and 24% for zinc.
For Inferred Resources, tonnes have increased by 39%, silver grades have decreased by
8%, lead grades have increased by 20%, zinc grades have increased by 11%, and contained
metal has increased by 28% for silver, 67% for lead and 54% for zinc.
The main reasons for the differences are Mineral Resource addition and conversion to
higher categories arising from drilling and level development, different cut-off grades, and
depletion due to mining.
Mineral Reserves
The Mineral Res erve estimates for the Ying property were prepared by Silvercorp under the
guidance of independent Qualified Person, Mr H A Smith, P.Eng, who takes QP responsibility for
those estimates. The estimated Mineral Reserves and metal content for the property as of June
30, 2016 are detailed in Table 2 b elow, and are based on the assumption that the current
stoping practices of cut and fill , resuing and shrinkage stoping will continue to be predomin ant.
The sub -vertical veins, generally competent ground, reasonably regular vein width, and hand -
mining techniques using short rounds, allow a significant degree of selectivity and control in the
stoping process. Minimum extraction widths of 0.3 m for resu ing and 0.8 m for shrinkage were
assumed.
Mining dilution and recovery factors vary from mine to mine and with mining method. Average
unplanned dilution factors have been estimated at 17% for both resuing and for shrinkage, while
assumed mining recovery factors are 95% for resuing stopes and 92% for shrinkage stopes.
The Ying 2017 Technical Report defines Mineral Reserves of 12.30 million tonnes in the Proven
and Probable categories grading 240 g/t Ag, 0.07 g/t Au, 3.75% Pb, and 1.27% Zn, containing
95.02 million oz silver, 27,270 oz gold, 460,960 tonnes lead, and 155,690 tonnes zinc. For the
property as a whole, total Mineral Reserve tonnes are noted to be 75% of Mineral Resource
(Measured plus Indicated) tonnes. Silver, lead and zinc Mineral Reserve grade s are 99%, 97%
and 97% respectively of the corresponding Measured plus Indicated Mineral Resource grades.
Metal content conversion for silver, lead and zinc is between 73% and 75%.
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Table 2. Ying Mining District - Mineral Reserves
Mines Categories Tonnes (Mt) Au
(g/t) Ag (g/t) Pb (%) Zn (%) EQ-Ag(g/t) Metal Contained in Reserves
Au (koz) Ag (Moz) Pb (kt) Zn (kt)
SGX Proven 2.32 272 5.25 2.69 509 20.28 121.60 62.21
Probable 3.18 248 4.86 2.11 459 25.40 154.55 67.06
Total Proven & Probable 5.50 258 5.02 2.35 480 45.68 276.15 129.27
HZG Proven 0.23 348 1.03 0.20 384 2.60 2.39 0.47
Probable 0.35 285 0.77 0.15 312 3.23 2.73 0.52
Total Proven & Probable 0.59 310 0.88 0.17 341 5.83 5.12 0.99
HPG Proven 0.47 1.10 88 3.76 1.13 297 16.43 1.31 17.50 5.26
Probable 0.29 1.15 108 3.28 1.17 304 10.84 1.02 9.65 3.45
Total Proven & Probable 0.76 1.12 95 3.57 1.15 300 27.27 2.33 27.15 8.71
TLP Proven 1.00 223 3.45 0.26 341 7.15 34.39 2.62
Probable 1.48 178 2.91 0.29 277 8.45 43.09 4.31
Total Proven & Probable 2.47 196 3.13 0.28 303 15.60 77.49 6.93
LME Proven 0.20 288 1.45 0.27 337 1.82 2.85 0.54
Probable 0.75 298 2.11 0.46 370 7.23 15.95 3.48
Total Proven & Probable 0.95 296 1.97 0.42 363 9.06 18.80 4.02
LMW Proven 0.46 316 3.29 0.25 428 4.69 15.21 1.14
Probable 1.57 234 2.61 0.29 323 11.83 41.04 4.63
Total Proven & Probable 2.04 252 2.76 0.28 346 16.52 56.25 5.77
Ying Mine Proven 4.67 0.11 252 4.15 1.55 431 16.43 37.85 193.95 72.24
Probable 7.63 0.04 233 3.50 1.09 374 10.84 57.16 267.01 83.45
Total Proven & Probable 12.30 0.07 240 3.75 1.27 396 27.27 95.02 460.96 155.69
Notes to Mineral Reserve Statement:
Stope Cut-off grades (Ag/Eq g/t): SGX – 190 Resuing, 170 Shrinkage; HZG – 170 Resuing; HPG – 200 Resuing, 175 Shrinkage; LME -
175 Resuing, 145 Shrinkage; LMW -180 Resuing, 135 Shrinkage; TLP - 155 Resuing, 130 Shrinkage.
Vein development cut-off grades of 50 g/t AgEq for all mines.
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$19/troy oz, lead US$0.90/lb, zinc US$1.00/lb
Processing recovery factors: SGX – 94.5% Ag, 96.5% Pb, 61.4% Zn; HZG – 95.6% Ag, 93.8% Pb; HPG – 88.9% Ag, 93.1% Pb, 45.1% Zn;
LME – 95.2% Ag, 93.2% Pb; LMW – 93.3% Ag, 95.0% Pb; TLP – 92.4% Ag, 93.5% Pb.
Exclusive of mine production to 30 June 2016.
Exchange rate assumed is RMB 6.90 : US$1.00.
Rounding of some figures may lead to minor discrepancies in totals.
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Table 3. Mineral Reserve Cut-off Grades and Key Estimation Parameters
Item SGX HZG HPG LME TLP LMW
Foreign exchange rate (RMB:US$) 6.50 6.50 6.50 6.50 6.50 6.50 6.50 6.50 6.50 6.50 6.50
Resuing Shrinkage Resuing Resuing Shrinkage Resuing Shrinkage Resuing Shrinkage Resuing Shrinkage
Operating costs
Sustaining Capital ($/t) (mine
development & exploration tunnelling
cost)
29.09 29.09 32.11 23.05 23.05 18.61 18.61 12.34 12.34 21.96 21.96
Mining Cost ($/t) 51.35 36.49 36.58 55.5 40.58 49.52 29.77 46.4 33.19 55.13 29.77
Hauling cost ($/t) 4.14 4.14 4.60 4.29 4.29 3.24 3.24 3.04 3.04 3.12 3.12
Milling cost ($/t) 8.09 8.09 8.26 8.33 8.33 12.98 12.98 8.20 8.20 5.13 5.13
G&A and product selling cost ($/t) 10.33 10.33 10.33 10.33 10.33 10.33 10.33 10.33 10.33 10.33 10.33
Mineral Resources tax ($/t) 2.42 2.42 2.19 2.04 2.04 2.18 2.18 2.03 2.03 2.22 2.22
Total operating costs (US$/t)* 105.4
2 90.56 94.07 103.5
4 88.62 96.86 77.11 82.34 69.13 97.89 72.53
Mining recovery (%) 95 92 95 95 92 95 92 95 92 95 92
Mill recoveries
Au (%)
75 75 Ag (%) 94.45 94.45 95.56 88.94 88.94 95.23 95.23 92.39 92.39 93.32 93.32
Pb (%) 96.51 96.51 93.77 93.08 93.08 93.22 93.22 93.48 93.48 94.98 94.98
Zn (%) 61.40 61.40 45.14 45.14 Breakeven COG (AgEq g/t) = opex $/t
/ (mining recovery% x processing
recovery% x Ag $ value per g*)
190 170 170 200 175 175 145 155 130 180 135
Notes:
Metal price assumptions: Ag $19/oz; Pb $0.90/lb; Zn $1.00/lb.
No Zn value ascribed to ore from HZG, LM, TLP and LMW sites.
Operating costs from 2016 calendar year actuals and projections
A comparison of Mineral Reserve estimates between July 1, 2013 (previous Technical Report)
and June 30, 2016 (2017 Technical Report) indicates the following:
Increase in total Ying Mineral Reserve silver, lead and zinc grades of 18%, 25%, and 26%
respectively.
Increase in total Ying Mineral Reserve metal contents for silver, lead and zinc of 15%, 21%
and 22% respectively.
SGX continues to be the leading contributor to the Ying Mineral Reserves, now accounting
for 45% of tonnes, 48% of silver, 60% of lead and 83% of zinc, compared to respective
values of 38%, 36%, 43% and 67% in 2013.
3% decrease in total Ying Mineral Reserve tonnage.
The Ying mine complex is a viable operation with a projected LOM through to 2036 based on
Proven and Probable Reserves. The potential exists for an extended LOM via further exploration
and development, particularly in areas of Inferred Resources.
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Economic analysis
Although Ying is a producing property and therefore does not require an economic analysis for
the purposes of the 2017 Technical Report, AMC believes it is reasonable to include a summary -
level analysis to illustrate the potential economic impact relative to the latest Mineral Reserve
estimations and to the associated production schedules.
The Ying District is largely a mature operation. A 20 -year LOM is envisaged for the resource as
currently understood, with average silver equivalent grades projected to be greater than or
close to 400 g/t for th e first 1 3 years and then to fall steadily through to the end of mine life.
Operating costs and capital costs are anticipated to be reasonable.
For the summary economic analysis, AMC has used the same metal prices as in the Mineral
Resource and Mineral Reserve estimation, namely:
Gold US$1,250/oz
Silver US$19/oz
Lead US$0.90/lb
Zinc US$1.00/lb
An exchange rate of 1US$ = 6.9RMB has been used for the economic analysis.
Based on the LOM production forecast and the metal price and other assumptions shown
above, a base case pre -tax NPV at 8% discount rate of $714M is projected ($535M post -tax).
Over the LOM, 63.1% of the net revenue is projected to come from silver, 3 1.4% from lead and
5.5% from zinc.
Qualified Persons
P. R. Stephenson, P .Geo, H . A. Smith, P.Eng, and A. Ross, P.Geo of AMC Mining Consultants
(Canada) Ltd. and H. Muller, FAusIMM of AMC Consultants Pty Ltd. are Qualified Persons as
defined by National Instrument 43 -101. P. R. Stephenson, H. A. Smith, A. Ross, and H. Muller
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.
Alex Zhang, P. Geo, VP Exploration of the Company, is the Qualified Person on the project as
defined under National Instrument 43-101 and he has verified and approved the contents of this
news release.
About Silvercorp
Silvercorp is a low-cost silver-producing Canadian mining company with multiple mines in China.
The Company’s vision is to deliver shareholder value by focusing on the acquisition of under
developed projects with resource potential and the ability to grow organically. For more
information, please visit our website at www.silvercorp.ca.
For further information
Gordon Neal
Vice President, Corporate Development
Silvercorp Metals Inc.
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Phone: (604) 669-9397
Toll Free: 1(888) 224-1881
Email: [email protected]
Website: www.silvercorpmetals.com
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Certain of the statements and information in this press 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. Any state ments or information that express or involve discussions with respect
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price of silver and other metals; the accuracy of mineral resource 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 the Company’s revenues and capital expenditures;
estimated production from the Company’s mines in the Ying Mining District; timing of receipt of
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Forward-looking statements or information are subject to a variety of known and un known
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