Wednesday, 5 June 2013

Silvercorp Metals continues to expand resource at SGX mine

Silvercorp Metals (TSE:SVM)(NYSE:SVM) has unveiled results from its drilling and exploration program last year at the SGX mine in the Ying mining district of China, saying it is continuing to focus on upgrading and expanding resource blocks on major mineralized veins. 
The company, which last month said it was implementing a new mining strategy at its Ying mines that is expected to lower total mining costs,  released late Tuesday results from underground tunneling as well as diamond drilling at the SGX mine. 
The silver miner said in the statement the results showed "good downdip and strike consistency of mineralization" in relation to existing producing veins, and extended high grade mineralized zones. 
The main aim of the underground program was to expand and upgrade existing resource blocks by step out and infill drilling, as well as by tunneling near current mining infrastructure, and to test for mineralization in unexplored areas of major veins. 
The new results will be included into the next resource and reserves update for the Ying Mining District, said Silvercorp, which owns several mines in China's Henan Province.
Of note from the latest results, underground tunneling revealed a zone measuring 65 metres in length and 1.25 metres in trude width grading 709 grams per tonne (g/t) silver, 9.86% lead and 4.54% zinc. The drift was at the 350 metre level along vein S14-1.
Other diamond drill highlights included a 3.03 metre intercept grading 451 g/t silver, 0.2% lead and 0.5% zinc at the 626 metre elevation. The diamond drilling program last year totalled almost 52,000 metres of underground drilling and 1,800 metres of surface drilling, with the results reported Tuesday comprising the remaining unreported holes completed in 2012. 
Looking ahead, the company is continuing its focus on the SGX mine on upgrading and expanding resource blocks along major mineralized structures using both infill and step-out drilling. Over 68,000 metres of underground drilling is planned for 2013, as well as 12,000 metres of underground tunneling. 
Silvercorp said in late May that it re-negotiated contracts with eight mining contractors at its operations in China's Ying Mining District, with updated fees to reflect the change in its mining strategy, which increases the use of "the lower cost shrinkage method" to 75 per cnet and reduces the use of the higher cost re-suing method to 25 per cent for expected ore production of 900,000 tonnes in fiscal 2014. 
The new contracts are expected to reduce total mining costs and increase mine life in the long term in the effort to combat increased labour costs in China. The new strategy is also expected to take the company to up to a mining rate of 3,200 tonnes per day. 

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