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Silvercorp Metals Inc
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Silvercorp drills 1.9 m of 15 g/t Au at DCG

2020-07-20 07:02 ET - News Release

Mr. Lon Shaver reports


Silvercorp Metals Inc.'s first underground drill hole at the DCG mine in the Ying mining district, Henan province, China, intercepted a 1.90-metre interval grading 15.0 grams per tonne gold.

In 2006, Silvercorp acquired the DCG exploration permit, which is adjacent to the north of the TLP mine. It covers an area of 19.77 square kilometres. A series of drill programs between 2006 and 2011 of 25 drill holes comprising 9,026 metres focused on obvious lead-zinc veins. A maiden resource estimate that complies with Chinese government requirements, but not National Instrument 43-101, was completed in 2014, and Silvercorp successfully converted the exploration permit to a mining permit in 2015. Information regarding the DCG mine, including a resource estimate, will be contained in the upcoming NI 43-101 update for the Ying mining district planned to be released this quarter, currently being prepared by the company with assistance from AMC Mining Consultants (Canada) Ltd.

In late 2018, the company decided to develop the DCG mine and bring it into production. At present, 1,670 m of a 4.2 m wide by 3.8 m high access ramp has been developed and the remaining 95 m should be completed by mid-August, 2020, which will allow for mining late this year.

In addition, a 1,756 m transportation ramp is also under development from the TLP mine camp area to enable ore haulage. So far, 447 metres have been completed, with the remaining 1,309 m expected to be completed by the end of April, 2021.

Despite the mapping of extensive gold soil geochemical anomalies at the DCG mine area by the previous owner in 2003, the 2020 underground drill program at the DCG mine of 8,000 m in 22 holes, like the previous drilling, was focused on extending the previously identified lead-zinc veins. Three holes have been completed and assay results have been received for one hole.

Previously, only very select intervals with obvious lead-zinc mineralization alteration were sampled for the drill holes from the Ying mining district. Recently, as potential gold mineralization was identified at the nearby LMW, LME and TLP mines, the company has decided to sample the full length of the drill core. As a result, hole ZK03AC702 intercepted a 1.02 m interval from 259.01 to 260.03 m grading 1.5 grams per tonne gold and a 1.90 m interval from 406.86 to 408.76 m grading 15.0 g/t Au, with native gold grains observed to be associated with strong silicification, and fine pyrite-ankerite veinlets occurring near the footwall contact of a diabase dike with the host Archean gneisses. The gold-bearing diabase contact appears perpendicular to the drill hole orientation, and therefore the 1.90 m interval is believed to be close to true width. The company was able to make this discovery of gold mineralization only by sampling the full length of the drill core. The extension of this gold discovery will now be the focus of the 2020 drilling program.

Hole ID        From        To    Interval        Ag      Pb      Zn        Au        Cu
                (m)       (m)         (m)     (g/t)     (%)     (%)     (g/t)       (%)

ZK03AC702    259.01    260.03        1.02         1    0.01    0.01      1.50      0.04
             406.86    408.76        1.90         1    0.03    0.04     15.00      0.01

The associated table lists the assay results of select mineralized drill hole intercepts obtained between 2006 and 2011.

                      SELECT DRILL RESULTS AT THE DCG MINE BETWEEN 2006 AND 2011
Hole ID        From         To    Interval   True thickness       Ag      Pb      Zn        Au     Cu
                (m)        (m)         (m)              (m)    (g/t)     (%)     (%)     (g/t)    (%)

ZK5002         5.48       5.73        0.25             0.18      135    8.73    4.12      0.73   0.00
ZK501        239.50     239.90        0.40             0.26       10    3.63    0.10      0.16   0.02
ZK901         29.38      30.23        0.85             0.54      115    0.71    0.00      0.09   0.02
ZK002        100.90     101.62        0.72             0.48       16    7.35    0.00      0.04   0.04
ZK002        170.70     170.94        0.24             0.17       22   10.54    0.00      0.03   0.00
ZK002        245.60     246.20        0.60             0.35        9    7.25    0.00      0.02   0.02
ZK102        246.28     246.83        0.55             0.31      167    0.74    0.05      0.34   0.02
ZK4001       202.76     202.88        0.12             0.10      241   33.63    2.48      2.50   0.30
ZK4002       201.28     201.67        0.39             0.25       27    5.46    0.10      0.00   0.06
ZK4002       234.69     235.90        1.21             0.78       12    3.89    0.41      0.05   0.01
ZK4042        60.82      61.12        0.30             0.21      163    8.43    5.19      3.00   0.21
ZK4042       214.38     214.74        0.36             0.29       19    4.89    0.04      0.13   0.00
ZK4031       234.16     234.75        0.59             0.53       90   18.02    0.17      0.01   0.03
ZK4032       225.86     226.66        0.80             0.55      116    1.29    0.07      0.63   0.05
ZK4071       135.21     135.57        0.36             0.33       52   10.54    0.14      0.00   0.00
ZK4051       138.28     139.02        0.74             0.60       17    4.27    0.09      0.00   0.04
ZK4052       106.94     107.44        0.50             0.32      771    0.40    0.08      0.12   0.29
ZK4053       403.88     404.41        0.53             0.43       80    9.21    0.07      0.85   0.00
ZK16001      236.34     237.94        1.60             1.42      132    0.20    0.70      0.02   0.05

Quality control

Drill cores are NQ size. Drill core samples, limited by apparent mineralization contact or shear/alteration contact, were split into halves by saw cutting. The half cores are stored in the company's core shacks for future reference and checking, and the other half-core samples are shipped in security-sealed bags to the Chengde Huakan 514 Geology and Minerals Test and Research Institute in Chengde, Hebei province, China, 226 km northeast of Beijing, and the Zhengzhou Nonferrous Exploration Institute Lab in Zhengzhou, Henan province, China. Both labs are ISO9000-certified analytical labs. For analysis the sample is dried and crushed to minus one millimetre and then split to a 200-to-300-gram subsample, which is further pulverized to minus 200 mesh. Two subsamples are prepared from the pulverized sample. One is digested with aqua regia for gold analysis with atomic absorption spectroscopy (AAS), and the other is digested with two acids for analysis of silver, lead, zinc and copper with AAS.

Channel samples are collected along sample lines perpendicular to the mineralized vein structure in exploration tunnels. Spacing between sampling lines is typically five m along strike. Both the mineralized vein and the altered wall rocks are cut with continuous chisel chipping. Sample length ranges from 0.2 m to more than one m, depending on the width of the mineralized vein and the mineralization type. Channel samples are prepared and assayed with AAS at Silvercorp's mine laboratory (Ying Lab) located at the mill complex in Luoning county, Henan Province, China. The Ying lab is officially accredited by the Quality and Technology Monitoring Bureau of Henan province and is qualified to provide analytical services. The channel samples are dried, crushed and pulverized. A 200 g sample of minus 160 mesh is prepared for assay. A duplicate sample of minus one mm is made and kept in the laboratory archives. Gold is analyzed by fire assay with AAS finish, and silver, lead, zinc and copper are assayed by two-acid digestion with AAS finish.

A routine quality assurance/quality control (QA/QC) procedure is adopted to monitor the analytical quality at each lab. Certified reference materials (CRMs), pulp duplicates and blanks are inserted into each lab batch of samples. QA/QC data at the lab are attached to the assay certificates for each batch of samples.

The company maintains its own comprehensive QA/QC program to ensure best practices in sample preparation and analysis of the exploration samples. Project geologists regularly insert CRM, field duplicates and blanks to each batch of 30 core samples to monitor the sample preparation and analysis procedures at the labs. The analytical quality of the labs is further evaluated with external checks by sending about 3 to 5 per cent of the pulp samples to higher-level labs to check for lab bias.

Data from both the company's and the labs' QA/QC programs are reviewed on a timely basis by project geologists.

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.

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