TABLE OF CONTENTS Dec 2012 - 0 comments

A far-sighted site

Silvercorp reading Chinese mine for production

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By: Russell Noble
2012-12-01

When Silvercorp Metals Inc of Vancouver acquired an exploration permit for the Gaocheng (GC) silver-lead-zinc property in southern China in April 2008, the entire mining industry was in the midst of one of its bleakest moments in history.

It was a time when fortunes were being lost and careers destroyed, but for Silvercorp, the opposite held true as the company moved forward with plans for the 5.5 km2 property it just bought for US$60.27 million in the heart of China’s mineral-rich Guangdong Province.

Unlike many companies in 2008 and later that were focusing on the North American market situation, Silvercorp continued to look beyond its borders and domestic uncertainties to develop another property in China that would help it continue to grow despite the tough economic times being faced globally.

And it worked because now, after nearly five years and approximately US$70 million in development costs, the company is just about ready to start production at the 1,600 tonne per day GC mine, located about 200 km west of Guangzhou City in southern China. 

"We are very excited about the GC project" commented Dr. Rui Feng, Silvercorp’s Chairman and CEO.  "Not only will GC make a meaningful addition to our production profile and expand our geographical presence in China, it is another example of the opportunities that are available in China to mining companies like ours with the necessary expertise and a track record of finding and successfully developing projects in China."

Historically, various state-sponsored Chinese Geological Biogrades and other companies had conducted geological and exploration in the project area between 1959 and the 2000s, and illegal mining activity during this same period had also resulted in the excavation of several tunnels and small-scale extraction of ore.

In 2002, the Guangdong Provincial Institute of Geological Survey (GIGS) developed 66m of tunnels to crosscut certain veins, and sampled and mapped a number of adits.

During 2006 and 2007, 36 diamond drill holes were punched into the property for a total of 11,470m and when Silvercorp took over in 2008, another 22 holes were drilled and a further 10,083m of core were added to the mix.

As the mining industry knows only too well, many companies didn’t survive those desperate times just five years ago, but with production already flowing from its flagship property, the Ying Mining District, Silvercorp did and it credits much of its existence today to sticking to its strategy of acquiring under-explored small scale projects with resource potential and focusing on a low-cost part of the world like China.

In fact, Silvercorp went to this part of China during those desperate times around 2007 and 2008 because, obviously, the GC site’s potential far outweighed what the site lacked in infrastructure.  Silvercorp also saw an opportunity to leverage on its experience in China which it had gained from the successful development and continuing operation of the Ying Mining District, located in Henan Province to the north.

Still Silvercorp’s new property, was indeed in a less-than-inviting part of the world in terms of topography, but, the GC project oozed with potential and excitement. In fact, while Silvercorp has been proceeding with construction of a mine at GC, the company has also continued with exploration activities on the property and recent results such as intercepts of 3.88

m and 2.12m grading 609 grams per tonne and 1,684 grams per tonne of silver respectively along with many new discoveries are encouraging.   

Current Mineral Resources, Measured and Indicated, totaled 7.63 million tonnes grading 122 g/t Ag, 1.32% Pb, and 3.08% Zn and Inferred Resources totaling 7.96 million tonnes containing 123 g/t Ag, 1.41% Pb, and 2.66% Zn.

Current Mineral Reserves of 4.8 million tonnes and the Proven and Probable categories contain approximately 18.5 million ounces of silver, 62,100 tonnes of lead, and 140,200 tonnes of zinc.

With these numbers in hand, Silvercorp quickly moved forward to build and develop what it expects will be a 12-year mine.

The mine design features two ramps, the main ramp and the exploration ramp. The main ramp is collared at an elevation of 179m on the southwest side of the project area and has been developed to 1,447m in length down to the 34.3m level.

The exploration ramp starts at the 113m elevation in the northern central area of the project and has been developed for approximately 804m which is parallel to the main mineralization veins down to the 52.6m level. The exploration ramp is connected to the main shaft, which is 6m in diameter.

Three major crosscuts tunnels have been developed from the two ramps on levels 50m, 100m and 150m respectively to determine the vertical extension of the mineralized zones. Drift tunnels have also been driven from the crosscut tunnels either eastwards or westwards along major mineralized structures to test the strike continuity of the mineralization zones.

Channel samples are mostly cut with a diamond saw from channels of 10cm wide, 3cm deep and 1 to 1.5m long. Continuous samples are collected along sample lines which run across the mineralized vein structures in both crosscut and drift tunnels.

The mine development covers an area approximately 600m by 1,200 m with a lateral and vertical requirement of 115.6 km and 28.9 km respectively.

As mentioned earlier, the mine features two ramps. The main ramp will be used for hauling ore, waste rock, materials, equipment, personnel and provide access for key services like dewatering lines, power, communications and ventilation.

The main shaft will be used for skip hoisting ore, cage hoisting waste, hoisting materials equipment, personnel and to provide access for key services like dewatering lines.

Mining is being conducted in two stages. Stage 1 targets fast-tracking the project into production and is being developed using mobile rubber-tired diesel-powered jumbo, loader and truck equipment with surface decline access and Stage 2 is using conventional tracked equipment including electric locomotive, rail cars, electric rocks shovels and pneumatic hand-held drills.

Selective stoping methods such as skrinkage and resue are employed with stope production drilling conducted with pneumatic jackleg drilling. In-stop rock movement is by gravity to draw points or hand-carting to steel-lined passes.

Stage 1 production mucking uses load-haul-dump loaders with trucks hauling ore to the surface stockpile. Ore is re-handled from the stockpile to the primary crusher feed bin using front-end loaders.

Stage 2 production mucking uses electric-powered over-throw rail loaders with rail cars and electric locomotives transporting ore to the Main Shaft overpass. Ore is skip hoisted to surface and conveyed to the surface crusher feed bin.

The life-of-mine average production rate will be 496ktpa and the total ore and waste produced from the mine will be approximately 4 Mt and 2.3 Mt respectively from 2013 to 2012 inclusive. Stage 1 ore will be trucked to surface, representing about 31% of the production, with the remainder shaft hoisted to surface.

All waste from the mine will be disposed at surface. About 37% of the waste will be trucked to surface with the remainder transported by rail car cage hoisting.

The mine’s shaft has two tower-mounted multi-rope friction winders, (shown above) one being used for skip hoisting of ore (400 kW), and the other for cage hoisting (252 kW) for waste, labour, materials and mine equipment. The shaft is also used for intake air, service access (ladders, cables and pipes) and labour emergency egress.

Silvercorp’s recovery process consists of crushing, grinding, flotation of lead, zinc and pyrite concentrates, and concentrate dewatering, with a tin recovery gravity separation circuit on pyrite floatation tails.

Two-stage crushing, with the second stage in closed circuit, from run of mine ore at 350 mm produces a -10mm crushed product. This is followed by a second-stage grinding in ball mills.

The crushing circuit uses Sandvik equipment and consists of a run-of-mine ore bin from which the ore is drawn by a vibratory feeder into the primary jaw crusher. Product is screened with the -10mm fines being conveyed forward to the fine ore bin while +10mm material feeds the secondary cone crusher through a buffer storage bin to maintain choke feeding of the crusher.

The grinding circuit works similar to the crushing system in that it is a two-stage design that is capable of 1,600 tpd production. The grinding circuit consists of a grate-discharge ball mill in closed circuit with a screw classifier followed by an overflow ball mill in closed circuit with cyclones to achieve the desired flotation feed size.

The grinding circuit is configured in two parallel trains of 800 tpd each.

Once GC successfully ramps up to full production in 2013, this new mine is expected to contribute an additional 1.5 million ounces of silver to Silvercorp’s production profile.  This, along with development work which has commenced to expand mining capacity at the Ying Mining District from 2,000 tonnes per day to 3,200 tonnes per day, means that Silvercorp is on its way to meeting its expected objective of producing over 10 million silver-equivalent ounces within the next two years.

In North American terms, the GC mine is a project that is being built in a distant place, under new rules and regulations, during one of the worst economic times in mining history. Those three ingredients alone (location, new rules, and money) have spelled disaster for many mining companies but for Silvercorp of Vancouver, they posed little of a deterrent as the company using its experience of exploring, developing and operating mines in China showed its true spirit of adventure by continuing to look for "good" times abroad when things were "bad" at home.

Photos

View (from left to right) of the concentrate thickener, mill and temporary shaft at the GC project.
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Caption: View (from left to right) of the concentrate thickener,...
Underground drilling at the GC project.
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Caption: Underground drilling at the GC project.
Temporary headframe.
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Caption: Temporary headframe.
Office and accommodation buildings.
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Caption: Office and accommodation buildings.
Main ramp adit.
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Caption: Main ramp adit.

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Silvercorp Metals Inc

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