An anonymous director reports
SILVERCORP WON AUCTION TO ACQUIRE THE KUANPING SILVER-LEAD-ZINC-GOLD PROJECT, HENAN PROVINCE, CHINA
Silvercorp Metals Inc., through a 100-per-cent subsidiary of Henan Found Mining Co. Ltd., Silvercorp's 77.5-per-cent subsidiary, has won an on-line open auction to acquire a 100-per-cent interest in the Kuanping silver-lead-zinc-gold project. The Kuanping project is located in Shanzhou district, Sanmenxia city, Henan province, approximately 33 kilometres north of the company's Ying mining district and 30 kilometres west of the Zhonghe project.
Auction details and payments:
The auction was for a 100-per-cent interest in the shares of Shanxian Xinbaoyuan Mining Co. Ltd., an affiliate of a Henan-provincial-government-controlled company located in Sanmenxia city, Henan province. The only asset held by Xinbaoyuan is the Kuanping project.
The base auction price for Xinbaoyuan was $8.1-million (U.S.) (52.5 million renminbi) plus the assumption of $2.1-million (U.S.) (13.3 million renminbi) debt of Xinbaoyuan. The final winning auction price was $11.4-million (U.S.) (73.5 million renminbi) plus the assumption of the debt for a total $13.5-million (U.S.) (86.8 million renminbi).
Henan Found is required to: (a) enter into a share transfer agreement within three business days after the auction; and (b) make the above payment within five business days after the execution of the share transfer agreement.
The Kuanping project
The Kuanping project covers an area of 12.39 square kilometres, being approximately three kilometres wide (east-west) and five kilometres long (north-south). The project's exploration rights are currently in a reservation period in accordance with China's mining law, and the company is in a position to apply for the mining permit. Once the mining permit is granted, then the environmental permit can be applied for.
Previous exploration activities completed include 1,458 metres of adits, 3,387 cubic metres of trenching and 11,759 m of diamond drilling in 52 diamond drill holes between 2006 and 2013 focused on the one-kilometre-by-one-kilometre northwest corner of the project area. Exploration has defined six silver-lead-zinc vein structures and one gold-silver vein structure. The most explored vein structures are K3 and K4. K3 dips 25 to 55 degrees to the north-northwest, and extends 600 m along strike and 400 m downdip from surface while K4 dips 35 to 65 degrees to the northwest, and extends 960 m along strike and 540 m downdip from surface. K3, K4 and a majority of other veins are still open along strike and at depth.
Based on the drill grid spacing of 68 m to 170 m along strike, and 45 m to 230 m downdip, mineral resources for silver, lead, zinc and gold were estimated in 2013 by the geological brigade No. 1 of Henan Province Non-ferrous Metals Geological and Mineral Resources Bureau using Chinese standards (not National Instrument 43-101 compliant), and were posted on the auction website. The mineral rights fee related to the estimated mineral resources, with a calculated value of $5.4-million (U.S.) (34.8 million renminbi) based on current regulations, has been previously paid in full.
Highlights of selected drill hole intercepts (see the attached table for details):
Hole ZK40305 intercepted a 4.15-metre interval from 179.49 m, grading 536 grams per tonne silver, 2.47 g/t gold, 2.05 per cent lead and 8.00 per cent zinc.
Hole ZK30703 intercepted a 0.23-metre interval from 131.45 m, grading 1,462 g/t Ag, 0.69 g/t Au, 0.84 per cent Pb and 1.41 per cent Zn.
Hole ZK41501 intercepted a 0.36-metre interval from 100.63 m, grading 1,561 g/t Ag, 5.98 g/t Au, 9.09 per cent Pb and 14.14 per cent Zn.
Hole ZK41105 intercepted a 0.48-metre interval from 215.77 m, grading 848 g/t Ag, 10.00 g/t Au, 9.82 per cent Pb and 7.92 per cent Zn.
Hole ZK40311 intercepted a 0.43-metre interval from 348.33 m, grading 92 g/t Ag, 8.78 g/t Au, 9.25 per cent Pb and 4.5 per cent Zn.
27 drill holes that intercepted significant silver grades
(1) True width unknown.
(2) New veins with no name assigned.
Guoliang Ma, PGeo, 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 Metals Inc.
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' well-being, and sustainable development.
We seek Safe Harbor.
© 2021 Canjex Publishing Ltd. All rights reserved.