Resource World Magazine

O C T O B E R / N O V E M B E R 2 0 1 9 www.resourceworld.com 9 SILVER According to the Silver Institute, global silver mine production fell 2.0% to 855.7 million ounces in 2018, marking the third year in succession that production has dropped. That fact alone is a cause for optimism that the price will con- tinue to rise. One mining industry official said prospectors are already reacting to the higher silver price by dusting off proj- ects and offering them up to potential bidders. "A guy delivered me ten projects to look at in Mexico," said Eric Fier CEO of SilverCrest Metals Inc. which is developing the Las Chispas sil- ver project northeast of Hermosillo, Sonora State, Mexico. But having suffered through a decade long slump that dates back to April 2011, when silver was trading at US $48.59/oz, some industry officials are understandably reluctant to get too excited about the recent uptick. In an interview, Fier said the long down-cycle has created a void that makes it difficult to find experienced people to fill man- agement roles. Between the ages of 40 and 60 years old, there are very few people out there who are available," said Fier. He has worked to fill the void by training people in their 30s and 40s for management roles. Fier said he encouraged by silver's recent rally. "But I don't dwell on it a lot because [SilverCrest's flagship] Las Chispas [proj- ect] is a great asset even at a low price." Las Chispas is the third highest grade primary silver deposit in the world. According to a Preliminary Economic Assessment announced in May, 2019, it is expected to produce an average of 13.7 million ounces of silver equivalent annually during the first four years of operations at an all-in-sustaining cost of US $4.89/ oz. The initial capital expenditure is forecast at US $100.5 million. Those estimates assume a silver price of US $16.68/oz and a gold price of US $1,269/oz. Over at MAG Silver, Paspalas is similarly confident about how the company's Juanicipio Project will fare, even if the silver price LEFT: SilverCrest Metals employees in front of the portal to the Las Chispas silver mine project in in Sonora State, Mexico. Photo courtesy SilverCrest Metals Inc. TOP: A Canadian one-ounce silver Maple Leaf coin. Photo courtesy The Royal Canadian Mint. Silvercorp: mining and building silver reserves Silvercorp Metals Inc. [SVM-TSX, NYSE American] has six produc- ing silver-gold-lead-zinc mines in the Ying Mining District of Henan Province, China. In Q1 Fiscal 2020 ended June 30, 2019, total ore mined at the Ying Mining District was 176,584 tonnes, up 13% compared to 156,730 tonnes mined in the prior year quarter. In Q1 Fiscal 2020, the Ying Mining District operations sold approxi- mately 1.7 million oz silver, 14.8 million lb lead, and 2.1 million lb zinc, compared to 1.3 million oz silver, 13.3 million lb lead, and 2.1 million lb zinc in the prior year quarter. The company continues to achieve improvements in dilution control using its Enterprise Blog system to assist and manage daily operations (see below). The company recently released results of an updated NI 43-101 technical report prepared by AMC Mining Consultants (Canada) Ltd. on the Gaocheng silver-zinc-lead property (the GC Mine) in Guangdong province, China. From the start of underground opera- tions in 2014 to December 31, 2018, a total of 1,251,000 tonnes have been mined at average head grades of 96 g/t silver, 1.5% lead and 2.7% zinc. Even with ore depletion from mining, there has been a 7% increase in tonnes of proven and probable reserves compared with reserves in the previous technical report of June 30, 2018. Based on proven and probable reserves only, the GC Mine has a projected life-of-mine of 12 years through to 2031, at an average annual production rate of about 300,000 tonnes with average silver equivalent grades of approximately 334 g/t for the first six years and then 271 g/t for the rest of the mine life. The GC Mine has the potential to extend mine life beyond 2031 by upgrading existing resources to reserves and by further exploration and development. For Q1 2020 ended June 30, 2019, combined silver production and sales was up 27% to about 1.9 million oz compared to the prior year quarter. Gold production and sales were up 43%. In an innovative use of social media in 2015, Silvercorp continues to obtain benefits from Enterprise Blog, an internet social media system that collects and distributes work-related information more effectively between parties and locations across the organization. The goal is to reduce dilution, improve safety and increase produc- tion efficiency. With $120 million in its treasury, the company plans to expand worldwide and is currently looking at advanced projects in Latin America, Eastern Europe, Africa, central Asia and Austral Asia. They are mainly seeking silver but will consider other precious metals.

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