Silvercorp Metals (SVM) to Acquire The Kuanping Silver-Lead-Zinc-Gold Project in China

October 13, 2021 5:05 PM EDT

Get instant alerts when news breaks on your stocks. Claim your 1-week free trial to StreetInsider Premium here.

Silvercorp Metals Inc. (NYSE American: SVM) is pleased to announce that the Company, through a 100% subsidiary of Henan Found Mining Co. Ltd. ("Henan Found"), Silvercorp's 77.5% subsidiary, has won an online open auction to acquire a 100% interest in the Kuanping silver-lead-zinc-gold project (the "Kuanping Project"). The Kuanping Project is located in Shanzhou District, Sanmenxia City, Henan Province, approximately 33 kilometres ("km") north of the Company's Ying Mining District and 30 km west of the Zhonghe Project.

Auction Details and Payments

  • The auction was for a 100% interest in the shares of Shanxian Xinbaoyuan Mining Co. Ltd. ("Xinbaoyuan"), 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 US$8.1 million (RMB¥52.5 million) plus the assumption of US$2.1 million (RMB¥13.3 million) debt (the "Debt") of Xinbaoyuan. The final winning auction price was US$11.4 million (RMB¥73.5 million) plus the assumption of the Debt for a total US$13.5 million (RMB¥86.8 million).
  • 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 km2, being approximately 3 km wide (east-west) and 5 km 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 ("m") of adits, 3,387 m3 of trenching, and 11,759 m of diamond drilling in 52 diamond drill holes between 2006 and 2013 focused on the 1 km by 1 km 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 - 55° to the north-northwest, and extends 600 m along strike and 400 m down-dip from surface, while K4 dips 35 - 65° to the northwest, and extends 960 m along strike and 540 m down-dip 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 down dip, 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 NI 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 US$5.4 million (RMB¥34.8 million) based on current regulations, has been previously paid in full.

Highlights of selected drill hole intercepts (see Table 1 for details):

  • Hole ZK40305 intercepted a 4.15 m interval from 179.49 m, grading 536 grams per tonne ("g/t") silver ("Ag"), 2.47 g/t gold ("Au"), 2.05% lead ("Pb"), and 8.00% zinc ("Zn");
  • Hole ZK30703 intercepted a 0.23 m interval from 131.45 m, grading 1,462 g/t Ag, 0.69 g/t Au, 0.84% Pb, and 1.41% Zn;
  • Hole ZK41501 intercepted a 0.36 m interval from 100.63 m, grading 1,561 g/t Ag, 5.98 g/t Au, 9.09% Pb, and 14.14% Zn;
  • Hole ZK41105 intercepted a 0.48 m interval from 215.77 m, grading 848 g/t Ag, 10.00 g/t Au, 9.82% Pb, and 7.92% Zn; and
  • Hole ZK40311 intercepted a 0.43 m interval from 348.33 m, grading 92 g/t Ag, 8.78 g/t Au, 9.25% Pb, and 4.5% Zn.

Table 1. 27 Drill Holes that Intercepted Significant Silver Grades

Hole ID

From

To

Interval

True Width

Ag

Pb

Zn

Au

Vein

(m)

(m)

(m)

(m)

(g/t)

(%)

(%)

(g/t)

ZK0001

122.47

122.74

0.27

0.25

477

3.06

0.56

0.26

K1

ZK0003

202.18

202.38

0.20

0.19

525

0.47

1.81

0.32

K1

ZK0801

122.77

123.00

0.23

0.20

1177

1.12

1.21

0.88

K1

ZK0802

107.90

108.42

0.52

0.40

219

0.68

2.39

0.05

K1

ZK0805

86.83

87.06

0.23

N/A[1]

237

0.27

0.11

0.05

N/A[2]

ZK20001

165.00

165.48

0.48

0.42

517

0.42

1.57

0.05

K2

ZK20701

132.09

132.47

0.42

0.40

239

0.20

0.46

0.05

K2

ZK30003

174.01

174.44

0.43

0.40

332

0.29

3.20

0.05

K3

ZK30011

126.96

127.41

0.45

N/A

371

0.18

0.86

0.05

N/A

ZK30703

131.45

131.68

0.23

0.21

1,462

0.84

1.41

0.69

K3

ZK30801

114.81

115.14

0.33

0.33

249

0.32

2.01

0.16

K3

ZK30803

128.29

128.51

0.22

0.21

1,111

2.12

3.06

0.59

K3

ZK30803

129.86

130.63

0.77

0.75

338

1.39

2.45

0.15

K4

ZK30805

221.38

222.14

0.76

0.76

424

1.25

2.35

0.27

K3

ZK31601

93.22

93.51

0.29

0.27

311

0.29

2.00

0.05

K3

ZK31611

195.75

196.55

0.80

0.78

234

3.35

2.60

0.65

K3

ZK40303

124.17

124.45

0.28

0.28

293

2.44

1.69

1.15

K4

ZK40305

179.49

183.64

4.15

3.19

536

2.05

8.00

2.47

K4

ZK40811

221.69

221.97

0.28

0.26

395

1.41

6.19

0.07

K4

ZK41101

108.18

110.91

2.73

1.98

45

0.16

0.85

0.05

K4

incl

108.18

108.49

0.31

0.22

218

0.29

2.96

0.05

K4

ZK41103

152.13

155.18

3.05

1.64

59

0.28

0.75

0.34

K4

incl

153.64

154.02

0.38

0.20

244

0.38

1.55

2.00

K4

ZK41105

215.77

216.25

0.48

0.42

848

9.82

7.92

10.00

K4

ZK41501

78.35

78.85

0.50

0.44

528

0.72

0.94

0.05

K4

and

100.63

100.99

0.36

N/A

1,561

9.09

14.14

5.98

N/A

ZK41503

111.19

111.50

0.31

0.21

604

1.06

3.19

0.05

K4

ZK41511

294.61

295.82

1.21

0.97

219

1.43

8.91

0.96

K4

ZK41907

218.07

218.37

0.30

0.20

431

1.37

5.57

2.65

K4

ZKM0701

113.37

114.56

1.19

1.14

349

0.61

0.48

0.21

K3

ZK40311

348.33

349.78

1.45

1.25

33

3.15

1.57

2.85

K4

incl

348.33

348.76

0.43

0.37

92

9.25

4.50

8.78

K4

[1] true width unknown

[2] new veins with no name assigned

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.



Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

Corporate News, Mergers and Acquisitions

Related Entities

Definitive Agreement