By: Northern Miner Staff
Silvercorp Metals (TSX: SVM; NYSE: SVM) is expanding its mining operations to meet the growing demand for silver used in the solar panels and wind technologies that are powering the transition to a green energy future.
The Canadian miner has “significant exposure to silver, which is an essential ingredient for the global push towards decarbonization, and, like gold, is viewed as a safe-harbour investment in times of turbulent markets,” says Lon Shaver, Silvercorp’s vice president.
Rui Feng, Silvercorp’s CEO, founded the company, headquartered in Vancouver, in 2003. Since then, it has become one of Canada’s most profitable mining companies, producing 81 million oz. of silver and over 1 billion lb. of lead and zinc since commercial production started at Ying in 2006.
Shaver says the company plans “to build on our already significant silver resource base by expanding our existing portfolio of projects through extensive drilling and consolidation, as well as through the acquisition of profitable projects.”
The company’s properties include the 68.74-sq.-km Ying Mining District in Henan Province, China, which hosts several operating silver-lead-zinc mines, including HPG, TLP, LM, and its flagship SGX mine, and the GC underground silver-zinc mine in the southern province of Guangdong. Silvercorp’s combined and consolidated mineral resources for Ying and GC currently stand at 13.7 million measured tonnes containing 86.2 million oz. of silver (88.4 million oz. silver-equivalent)*, 16.5 million indicated tonnes containing 91.5 million oz. of silver (95.7 million oz. silver-equivalent)*, and 27.0 million inferred tonnes containing 133.5 million oz. of silver (147.2 million oz. silver-equivalent)*.
*Gold was converted to silver-equivalent at a rate of 65:1
The company also has indirect exposure to silver through equity positions in several other precious metal exploration and development companies, the most significant being Bolivia-focused New Pacific Metals (TSX: NUAG; NYSE: NEWP), where Silvercorp is the largest shareholder with a 28.2% interest. New Pacific holds three silver assets, including its flagship Silver Sand project, Bolivia’s most significant silver discovery in the last 30 years, approximately 25 km northeast of the world-famous Cerro Rico silver and base metals mineral system near Potosi.
In April 2020, an initial resource estimate for the project pegged resources at 35.39 million measured and indicated tonnes grading 137 grams silver per tonne for 155.86 million oz. contained silver and inferred resources of 9.84 million tonnes at 112 grams silver for 35.55 million silver ounces.
“New Pacific has proven to be a great investment with huge growth potential,” says Shaver. “An updated resource estimate following the recent expansion drill program is underway at Silver Sand and will feed into a preliminary economic assessment expected later this year.”
Silvercorp also holds a 29.5% interest in Canadian gold explorer Whitehorse Gold (TSXV: WHG; US-OTC: WHGDF), currently focused on advancing its wholly-owned Skukum gold project in the southern Yukon, approximately 55 km south of Whitehorse. Prior to the exploration program completed in 2021, mineral resources for the project stood at 1.33 million indicated tonnes containing 274,544 oz. contained gold and 5.36 million oz. silver (21.81 million oz. silver-equivalent) and inferred resources of 1.11 million tonnes containing 223,873 oz. gold and 1.91 million oz. silver (15.96 million oz. silver-equivalent).
According to Shaver, Silvercorp expects meaningful growth in production for the current fiscal year, with silver output “increasing by approximately 17%, 9% for lead, 24% for zinc, and 109% for gold compared to the previous fiscal year.”
For the 2022 fiscal year ended March 31, 2022, the company produced 6.1 million oz. of silver, 64.4 million lb. of lead, 26.8 million lb. of zinc, and 3,400 oz. of gold. However, he says the company “expects production to increase at Ying and GC and have set our FY23 production guidance at 7-7.3 million oz. of silver, 68.4-71.3 million lb. of lead, 32-34.5 million lb. of zinc, and 6,300-7,900 oz. of gold.”
To further production growth, Silvercorp is building a new 3,000-tonnes-per-day flotation mill and tailings storage facility at Ying. The operation currently has two mills and mill No. 3, slated for completion at the end of 2023, will bring the milling capacity to 5,000 tonnes per day.
Shaver says that Silvercorp has “a strong cash position, with about $213 million currently in the treasury,” adding that it also benefits from low all-in sustaining costs (AISCs) of US$8.82 per oz. of silver compared to its peers.
“We will use our cash to continue to develop and advance our existing pipeline of projects and look to acquire other high potential projects to add to our silver resources,” he says.
Prepared by The Northern Miner, on behalf of Silvercorp Metals Inc., a Stockhouse Publishing client.