Silvercorp Metals finds multiple mineralized zones at HPG mine

Silvercorp Metals (TSE:SVM) (NYSE:SVM) has revealed 2012 underground exploration results from another one of its mines in China's Ying Mining District, saying more tunneling and drilling will continue at the HPG mine this year. 

The results released late Tuesday are from the underground tunneling and diamond drilling exploration program completed in 2012, which was aimed at upgrading and expanding the previously defined resource blocks within major vein structures. 

Of the mineralized zones exposed in underground tunnels, drift PD2-530-H16-NYM1 at the 530 metre level along vein H16 revealed a zone 50 metres in length and 1.06 metres in true width grading 4.13 grams per tonne (g/t) gold, 94 g/t silver, 5.14% lead and 3.12% zinc.

Notable drill hole results meanwhile included an 1.16 metre intercept grading 1.15 g/t gold, 729 g/t silver, 3.34% lead, and 7.3% zinc at the 345 metre elevation. The company said that of the 63 holes drilled in 2012 at the mine, 41 of them intercepted "single or multiple gold-silver-lead-zinc mineralized zones". 

This year, Silvercorp is planning a 3,795 metre underground tunneling and 20,000 metre diamond drilling campaign, including 1,600 metres of surface drilling. 

Aside from expanding previously defined resources between the 300 metre and 750 metre elevations, the goal is also to explore for new resources within unexplored parts of major vein structures. 

Last week, Silvercorp unveiled underground exploration results from its LM mine in the Ying district, saying the new results show good consistency and the potential to expand reserves. 

The company, which has several mines in China and is developing its GC project that is expected to become its next operating mine this year, in late May 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 cent 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.