Ying resource up 30%

Vancouver — Sixteen new veins at Silvercorp Metals’ (SVM-T, SVMFF-O) Ying property, in Henan province, China, have boosted the deposit’s resource estimate by 30%.

The main deposit at Ying is the SGX zone, which contains both high-grade and low-grade silver-lead-zinc resources. Exploration delineated four new veins at SGX. The new estimate pegs measured and indicated high-grade resources at 1 million tonnes of 1,232 grams silver per tonne, 21.3% lead and 7.57% zinc, while the low-grade estimate is 799,100 tonnes grading 227 grams silver, 3.71% lead and 4.04% zinc.

Silvercorp also outlined two new mineralized zones. The HPG zone added eight veins to the project for 201,890 measured and indicated tonnes grading 76 grams silver, 2.15 grams gold per tonne, 3.95% lead, and 0.38% zinc. The HZG zone added four veins for 248,480 tonnes of 598 grams silver, 1.76% lead, and 0.78% copper indicated resources.

In total, measured and indicated resources increased by 30%. Inferred resources also rose by 26% to a total of 3.5 million tonnes containing 72 million oz. silver, 450,740 tonnes lead, 155,390 tonnes zinc, 4,510 tonnes copper and 68,710 oz. gold.

Mineralization at Ying occurs as multiple quartz-ankerite veins in north-northeast-trending fault-fissure zones. Individual veins are typically long but narrow — often a kilometre long, but between 40 cm and 1 metre wide.

Silvercorp started exploring at Ying in August 2004 and has since completed over 63 km of tunnel, drifts, declines, raises and shafts, as well as over 78 km of underground and surface drilling.

The company’s plan at Ying is the reverse of most mining plans — rather than defining a reserve via drilling before mining, Silvercorp’s motto was to produce first and then use the production cash flow to finance exploration. The company started mining high-grade silver veins from the moment it received its mining permit at the end of March.

The rush to production has meant that Silvercorp has only drawn $5 million from the treasury to fund the roughly $25 million spent at Ying. However, without a feasibility study, important figures such as annual production and operating costs are hard to predict.

Silvercorp has also been criticized for allowing the production drive to compromise safety.

In other news, in mid-September, Silvercorp declared a dividend of 15 per share. It is the first dividend from Silvercorp, and the first time a Canadian company has paid dividends to shareholders using profits from a mine in China.