Silvercorp Metals Inc. (“Silvercorp” or the “Company”) (TSX:SVM) (NYSE:SVM) reports that the Company, through its 77.5% owned subsidiary, Henan Found Mining Co. Ltd., has initiated a process to construct a new 3,000 tonne per day flotation mill and tailings storage facility (“TSF”) adjacent to the existing No. 2 mill, currently operating at the Ying Mining District, Henan Province, China.
According to regulations, the approval process requires: i) a construction proposal and plan for new development projects to be filed with the Development and Reform Commission of Luoyang City (filed by the Company); ii) a completed Environmental Assessment Report to be filed with the Environmental Protection Authority of Luoyang City; and iii) a completed Safety Assessment report to be filed with the Work Safety Authority of Luoyang City.
The Company has also applied for the re-zoning of the land usage with the County government and has begun negotiations for a long-term lease or acquisition of land. An engineering firm has been engaged to complete approximately 100 foundation engineering drill holes for the area covering the TSF. The Company has signed design contracts with Changchun Gold Design Institute Co. Ltd., a recognized Chinese engineering firm, to design the mill and the TSF. The firm was founded in 1958 and has designed well over 1,400 gold and base metals mines, mills, and TSFs over its history.
The preliminary construction budget, including the land usage rights, is estimated to be approximately US$25 million for the mill and US$38 million for the TSF. The new mill will be equipped with a gold gravity separation circuit and designed to produce silver-lead, zinc, and copper concentrates. The TSF may be constructed in two phases, with approximately 10.2 million cubic metres of storage capacity in Phase 1, and approximately 8.9 million cubic metres of capacity in Phase 2, for a total storage capacity of 19.1 million cubic metres. The Company expects that construction of the mill will be completed by the end of 2023, and Phase 1 of the TSF by mid-2024.
The rationale for building the new mill and TSF is to provide the Company with additional capacity to continue growing its existing mining operations at the Ying Mining District in light of recent successful drilling programs that have discovered new resources, to process ore from its recent acquisitions, and for potential consolidation of other nearby projects. Once the new mill is completed, the Company will decommission its No. 1 mill to have approximately 5,000 tonnes per day of milling capacity. A new facility comprising a training and R&D centre has been planned at the site of the No. 1 mill.
