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 in 2003. It is now 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 Chinese properties include the 68.7-sq.-km Ying Mining District in Henan Province, 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.
Silver resources at Ying currently stand at 8.4 million measured tonnes grading 264 grams silver per tonne for 71.3 million contained oz. silver and indicated resources of 11.7 million tonnes at 212 grams silver for 80 million oz. silver. Inferred resources add 18.6 million tonnes at 234 grams silver for 109.9 million silver ounces.
GC contains measured resources of 5.3 million tonnes grading 88 grams silver for 14.9 million oz., indicated resources of 4.8 million tonnes at 75 grams silver for 11.5 million oz., and 8.4 million inferred tonnes at 87 grams silver for 23.6 million oz. of silver.
The company also has indirect exposure to silver through equity positions in several other precious metal exploration and development companies. The most significant of these is 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, approximately 25 km northeast of the world-famous Cerro Rico silver and base metals mineral system near Potosi. The project is considered Bolivia’s most significant silver discovery in the last 30 years.
In April 2020, an initial resource estimate for Silver Sand pegged resources at 35.4 million measured and indicated tonnes grading 137 grams silver per tonne for 155.9 million oz. contained silver and inferred resources of 9.8 million tonnes at 112 grams silver for 35.6 million silver ounces.
New Pacific has proven to be “a great investment with huge growth potential,” says Shaver. “Following the completion of an expansion drill program at Silver Sand, an updated resource estimate is underway on the project and will feed into a preliminary economic assessment, which we expect to complete later this year.”
Silvercorp also holds a 29.5% interest in Canadian gold explorer Whitehorse Gold (TSXV: WHG; US-OTC: WHGDF), which is focused on advancing its wholly-owned Skukum gold project in the southern Yukon, approximately 55 km south of Whitehorse.
Prior to an exploration program completed on the property last year, mineral resources for Skukum stood at 1.3 million indicated tonnes containing 274,544 oz. gold and 5.4 million oz. silver (21.8 million oz. silver-equivalent) and inferred resources of 1.11 million tonnes containing 223,873 oz. gold and 1.9 million oz. silver (16 million oz. silver-equivalent).
According to Shaver, Silvercorp expects “meaningful growth in production for the current fiscal year, with silver output expected to increase by approximately 17%, 9% for lead, 24% for zinc, and 109% for gold compared to the previous fiscal year.”
For the 2022 fiscal year (ending Mar. 31), 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 has set its 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 support this 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 with a third slated for completion at the end of 2023 and will increase 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 the company’s 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.
The preceding Joint-Venture Article is PROMOTED CONTENT sponsored by SILVERCORP METALS and produced in cooperation with The Northern Miner. Visit www.silvercorpmetals.com for more information.