Silvercorp Metals reports discovery of several new veins at TLP mine

Silvercorp Metals (TSE:SVM)(NYSE:SVM) has unveiled results from its 2012 underground diamond drilling and tunneling program at the TLP mine in Henan Province, China, uncovering several new mineralized vein structures. 

The Canadian mining company, with several mines in China, told investors late Monday that hole ZKT0331 intercepted an interval of 1.91 metres of vein T33 grading 1,699 grams per tonne (g/t) silver, 0.82% lead and 0.29% zinc.

Meanwhile, hole ZKG0621 hit four veins, with grades as high as 669 g/t silver, 3.16% lead and 1.03% zinc. And hole ZKG0622 intercepted three veins, with an interval of 1.27 metres of vein T16E grading 909 g/t silver, 5.35% lead and 0.49% zinc. 

The 2012 underground drilling program was designed to test the downdip and strike extension of the major mineralized vein structures, and to explore for new structures. 

In the second half of last year, however, the company revised its underground drilling strategy to test lateral extensions by infill and step out drilling at shallow depth on the upper portions of the major vein structures at or above the 700 metre elevation. This was instead of step out drilling at depths below the current mining depth.

Silvercorp has said that the change in strategy has been successful in defining additional high grade mineralization of production veins, as well as in finding new veins where mine development exists. As of early March, it had received results for 51 holes, 44 of which intercepted "single or multiple mineralized zones".

The 2012 program uncovered seven new mineralized vein structures, the company said in the statement, namely T23, T33W3, T41, T16E1, T16E2, T15W and T15W1.

Looking ahead, the miner has planned an exploration and resource development program at the TLP mine this year, to be made up of around 9,790 metres of underground tunneling and 14,500 metre of underground drilling. 

The aim of the campaign will be to infill drill previously defined resource blocks at shallower depths, as well as further exploration. 

"Where possible, the program will take advantage of existing underground mine development to access new discoveries and will drive new tunnels as required to provide drill stations in prospective areas beyond the reach of existing mine workings," Silvercorpsaid in the release on Tuesday. 

The China-focused silver miner, which last month withdrew its appeal of the dismissal of the defamation case it lodged in the fall of 2011, is now developing the GC project in southern China, which it expects will become its next operating mine in 2013. 

In 2011, an anonymous letter addressed to the Ontario Securities Commission, Silvercorp's auditors and several media outlets accused the commpany of overstating its financial results and resource deposits. The company denied any wrongdoing, and a forensic auditor's report later supported the precious metal producer's financial statements.      

Silvercorp said in March that while it disagreed "with the decision of Justice Edmead- that "short and distort" publications are statements of opinion and not statements of purported fact", it believed it was in the best interest of the company and its shareholders to end the potentially lengthy and costly litigation, and to focus on its GC project to deliver value.