Silvercorp secures permit in China

Silvercorp Metals (SVM-T) has been given the final permit for the most prospective area at its Ying Silver Project in China.

The permit covers roughly 10 sq. km of the Sha Gou Xi area, which lies within the 52-sq. km Ying Silver Project in China’s Henan province.

The permit allows for the operation of a 600 tonne per day underground mine to produce silver, lead and zinc. The production rate can be increased in the future through amending the existing mining permit when expanded resource estimates have been filed with the Department of Land and Resources of Henan.

In a news release issued on Mar. 30 the company says 35,000 metres of exploration and development tunneling were completed during the last 18 months, allowing it to start mining operations immediately, and without further capital costs.

Between now and March 31, 2007, Silvercorp anticipates the production rate will gradually reach the designed 600 tonnes per day capacity, for total production during the period of 140,000 tonnes of materials, containing 70,000 tonnes of high grade ores plus 70,000 tonnes of waste rock.

The anticipated grades for the 70,000 tonnes of high-grade ores are 45 oz per tonne of silver, 32% lead, and 6.6% zinc. The average realized prices net of smelter charges and value added tax during the first 3 months of 2006 — based on US$3.1 million revenues already realized from exploration production during the period — are US$7.6 per ounce for silver, US$0.46 per pound for lead, and US$0.62 per pound for zinc.

The company also has plans for a program of 31,000 metres of mining, development, and exploration tunnels and 32,800m of drilling, including 71 underground holes and 16 surface holes for 2006 in order to expand the high grade silver resources at the Ying project.

The approximately US$15 million budget for the mining production, exploration and development program will be financed entirely from anticipated production revenues.

Development of the Ying Project is carried out through Silvercorp’s 77.5% subsidiary, Henan Found Mining a Sino-foreign joint venture company which holds 100% of the Ying Project and operates under a 30-year business license.