Silvercorp Won Auction to Acquire the Zhonghe Silver Project IN Luoning County
Silvercorp Metals Inc.
Suite 1750 – 1066 West Hastings
St.
Vancouver, BC, Canada V6E 3X1
Tel: 604-669-9397
Fax: 604-669-9387
NEWS RELEASE
Trading Symbol: TSX / NYSE American: SVM
SILVERCORP WON AUCTION TO ACQUIRE THE ZHONGHE SILVER PROJECT
IN LUONING COUNTY, HENAN PROVINCE, CHINA
VANCOUVER, British Columbia – January 21, 202 1 – Silvercorp Metals Inc. ("Silvercorp” or the
“Company”) (TSX/NYSE American: SVM) announce s that its subsidiary, Henan Found Mining Co. Ltd.
(“Henan Found”), won an online auction to acquire the exploration rights to the Zhonghe Silver Project
(the “Zhonghe Project”) from the Henan provincial government. The auction was held on December
17, 2020 and following a public comment period, the Company received confirmation of its successful
bid. The Zhonghe Project covers an area of 4.96 square kilometre s (“km”) approximately 50 km (75
km by road) northeast of Silvercorp’s Ying Mining District, also located in Luoning County.
Silver-lead-zinc mineralization at the Zhonghe Project is similar to that found at the SGX Mine in the
Ying Mining District (i. e., massive galena lenses in structural veins). Highlights of selected drill
intercepts include:
• Hole ZK2602 intercepted 3.55 metres (“m”) from 145.53 m grading 876 grams per ton (“g/t”)
silver (“Ag”), 25.25% lead (“Pb”), and 15.39% zinc (“Zn”);
• Hole ZK806 intercepted 1.95 m from 513.95 m, grading 1,592 g/t Ag, 12.33% Pb and 3. 45%
Zn;
• Hole ZK804 intercepted 1.71 m from 275.54 m, grading 955 g/t Ag, 14.30% Pb and 10.82% Zn.
• Hole ZK1104 intercepted 1.36 m from 283.16 m, grading 1,383 g/t Ag, 29.92% Pb, and 5.08%
Zn; and
• Hole ZK4204 intercepted 1.63 m from 570.98 m, grading 1,446 g/t Ag, 1.39% Pb, and 4.0% Zn;
The Company will utilize Henan Found’s existing management team at the Ying Mining District to
manage the future development of Zhonghe. As the largest taxpayer in Luoning County, Henan Found
has established a good working relationship with the Luoning government, has an excellent reputation
within the local community, and intends to bring in the local government and community as 8% - 10%
partners on the project. The Company expects full support from the local government and community
in the future, converting the exploration right to a mining license and developing operations at the
Zhonghe Project.
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The Zhonghe Project
The exploration right comprising the Zhonghe Project is located in Dongshong Township of Luoning
County and covers an area of 4.9 km 2, being approximately 1.1 km wide (east -west) by 4.9 km long
(north-south). From March 2016 to August 2019, the Department of Natural Resources of Henan
Province completed 3,213 m3 of trenching and 36,091 m of diamond drilling in 54 diamond drill holes
that defined silver -lead-zinc vein structures extending over 4.9 km long, and from surface at 640 m
elevation down to minus 450 m elevation, dipping to the west at an average of 70 degrees.
Based on the drill grid spacing of 175 m to 223 m along strike and 162 m to 272 m down dip, mineral
resources for silver, lead and zinc estimated using Chinese standards (not NI 43 -101 compliant) were
calculated by the No 1 Institute of Geological and Mineral Resource Survey in Henan Province in 2019,
and published on the auction website.
Twenty-three drill holes intercepted significant silver grades listed in the table below.
Hole ID From
(m)
To
(m)
Interval
(m)
True
Width
(m)
Ag
(g/t)
Pb
(%)
Zn
(%)
ZK006 614.75 618.21 3.46 1.84 475.25 7.85 6.21
ZK1104 283.16 284.52 1.36 0.91 1383.00 29.92 5.08
ZK1206 278.20 280.10 1.90 1.17 287.00 9.83 4.90
ZK1604 331.93 333.08 1.15 0.57 228.00 21.66 17.53
ZK2006 407.93 409.56 1.63 0.83 395.00 0.31 0.59
ZK2204 308.22 311.06 2.84 1.33 223.77 3.80 8.36
ZK2602 145.53 149.08 3.55 1.88 875.68 25.35 15.39
ZK2606 430.50 431.79 1.29 0.58 304.00 3.05 2.72
ZK2701 25.68 26.50 0.82 0.45 385.00 0.56 2.45
ZK2702 404.20 405.81 1.61 0.60 376.00 0.68 0.85
ZK2702 693.25 694.84 1.59 0.93 475.00 3.41 6.28
ZK2703 475.98 477.38 1.40 0.93 239.00 2.07 4.51
ZK306 334.69 336.76 2.07 1.67 264.00 0.63 6.20
ZK3102 82.03 83.97 1.94 0.60 342.00 3.19 1.52
ZK3204 426.53 429.34 2.81 1.77 202.00 4.21 2.31
ZK3904 470.30 472.19 1.89 0.66 231.00 1.70 2.25
ZK3906 736.98 737.88 0.90 0.26 405.00 0.65 0.76
ZK404 188.57 189.77 1.20 0.84 822.00 2.12 10.15
ZK4204 570.98 572.61 1.63 0.86 1446.00 1.39 4.00
ZK4306 545.46 547.20 1.74 0.58 400.00 0.23 1.90
ZK4308 771.60 773.14 1.54 0.51 354.00 1.14 2.88
ZK804 275.54 277.25 1.71 1.27 955.00 14.30 10.82
ZK806 513.95 515.90 1.95 1.29 1592.00 12.33 3.45
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Auction Results and Payment Details
• The reserve price for the Zhonghe Project Exploration Permit was RMB 485 million per the
auction notice posted by the Department of Natural Resource of Henan Province. The final
winning bid submitted by the Company was RMB 495 million, or approximately US $76
million.
• The Company will enter into a mineral right s transfer contract with the Department of
Natural Resources of Henan Province and will make a first payment of approximately
US$15.2 million, once the project area is cleared by the authorities as a non-military area.
The first payment represents 20% of the purchase price.
• The remaining 80% of the purchase price is due only in the event the exploration right is
converted into a mining license and shall be paid annually over the duration of the mining
license.
• When the exploration right is converted to a mining license, no additional mineral rights
transfer paym ents will be required to be paid (according to Article 16 of The Interim
Measures for the Administration of Fee Collection of the Transfer of Mining Rights by
Government).
Future Exploration and Development Plans
Based on China's regulations on issuing mining licenses, one requirement is that this project will need
to be advanced to “exploration stage”, that is, at least 50% of the resource estimates shall be defined
by a drilling grid averaging no greater than 75 m by 75 m. For 50% of the area of mineralization (4 km
long by 1 km wide) at the Zhonghe Project to reach a drilling grid of 75 m by 75 m from its current
stage, it is estimated 200,000 m in 350 holes will need to be drilled. The Company plans to initiate a
drilling campaign in the first quarter of 2021 that will be completed by 2022.
Guoliang Ma, P. Geo., Manager of Exploration and Resource of the Company, is the Qualified Person
for Silvercorp under NI 43 -101 and has reviewed and given consent to the technical information
contained in this news release.
About Silvercorp
Silvercorp is a profitable Canadian mining company producing silver, lead and zinc metals in
concentrates from mines in China. The Company’s goal is to continuously create healthy returns to
shareholders through efficient management, organic growth and the acquisition of profitable projects.
Silvercorp balances profitability, social and environmental relationships, employees’ wellbeing, and
sustainable development. For more information, please visit our website at www.silvercorp.ca.
For further information
Lon Shaver
Vice President
Silvercorp Metals Inc.
Phone: (604) 669-9397
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Toll Free: 1 (888) 224-1881
Email: [email protected]
Website: www.silvercorp.ca
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Certain of the statements and information in this news release constitute “forward -looking statements” within the
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set forth above, investors should not place undue reliance on forward-looking statements.
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CAUTIONARY NOTE TO US INVESTORS
This news release has been prepared in accordance with the requirements of NI 43‐101 and the Canadian Institute of
Mining, Metallurgy and Petroleum Definition Standards, which differ from the requirements of U.S. Securities laws. NI
43‐101 is a rule developed by the Canadian Securities Administrators that establishes standards for all public disclosure
an issuer makes of scientific and technical information concerning mineral projects.