Silvercorp Metals Inc (TSX:SVM, AMEX:SVM), the China-focused metals miner, has once again expanded its project portfolio, by acquiring the Kuanping silver-lead-zinc-gold project via an online open auction for US$13.5 million, or RMB 86.8 million.
The Kuanping asset, owned by Shanxian Xinbaoyuan Mining Co. Ltd, spans over 12 square kilometres (sq km) in the Shanzhou district of Henan Province and sits around 33km north of Silvercorp's flagship Ying project and 30km west of its Zhonghe silver property.
In January this year, Silvercorp reported that it had successfully bid for the exploration rights at Zhonghe, also via online auction, offering RMB 495 million, or around US$76 million.
Previous exploration at the Kuanping project has included 1,458 metres (m) of adits, 3,387 cubic metres of trenching, and 11,759m of diamond drilling between 2006 and 2013 focused on a 1km by 1km northwest corner, noted Silvercorp.
READ: Silvercorp Metals set to expand portfolio in China as it wins online auction for Zhonghe silver project
The work defined six silver-lead-zinc vein structures and one gold-silver vein structure, while drill highlights included a 4.15m interval starting from 179.49m depth at a grade of 536 grams per tonne (g/t) silver, 2.47 g/t gold (Au), 2.05% lead (Pb), and 8% zinc (Zn).
Shanxian Xinbaoyuan Mining Co. Ltd, which holds the project, is an affiliate of a Henan Provincial government-controlled company.
Kuanping's exploration rights are currently in a reservation period in accord with China's mining law and Silvercorp can apply for the mining permit. Once that is granted, then the environmental permit can be applied for, the firm said.
The base auction price for Xinbaoyuan was US$8.1 million (RMB 52.5 million) plus the assumption of US$2.1 million (RMB 13.3 million) of debt of Xinbaoyuan.
The final winning auction price was US$11.4 million (RMB 73.5 million) plus the assumption of the debt for a total US$13.5 million (RMB 86.8 million).
In a separate statement, Silvercorp also reported results from this year's exploration at its LMW mine, one of six mines that make up the group's Ying project, which showed "thick and high-grade intercepts".
From May 1 to September 30, 2021, the company said that 23,908m from 166 diamond drill holes, including 152 underground holes and 14 surface holes, were completed at the LMW mine. Assays for 102 holes have been received, with 70 hitting mineralization. Currently there are 12 rigs drilling at the LMW mine.
Drilling hit high-grade silver-lead-zinc veins at the northwest and east sides of the resource, reported the company, with highlights including an 8.87m interval (7.60m true width) at vein LM7W grading 705 grams per tonne (g/t) silver, 1.51% lead, 0.08% zinc, 0.06 g/t gold, and 0.05% copper from 24.73m depth in one hole.
Also at LMW, a total of 1,753m of exploration tunnels were developed in the period, said Silvercorp.
At the elevation of 834m, three decline tunnels exposed low angle gold vein LM22 with ore lengths of 20m, 18m and 10m, and gold grades of 26.89 g/t, 20.80 g/t and 38.95 g/t, respectively, it told investors.
A four-hole drilling program has started to test the continuity of LM22 at the 834m elevation, it added.
Silvercorp is a profitable Canadian mining company producing silver, lead and zinc metals in concentrates from mines in China.
Contact the author at giles@proactiveinevstors.com