Silvercorp Metals Inc (NSYEAMERICAN:SVM) (TSX:SVM) has launched a ten-rig drill program targeting gold at its mines in China following promising findings from recent tunneling work, the company told investors.
Historical drill results from the LMW, LME and TLP mines within the group's Ying mining district in Henan Province have shown limited gold assays previously. But this was because the focus had been on mining silver-lead-zinc veins so the character of gold mineralization present was poorly understood, Silvercorp said in a statement.
READ: Silvercorp Metals lifts cashflow from operations and posts net income of US$34.3 million in full-year 2019/20
The Vancouver-headquartered company is a profitable underground miner with assets in China and boasts a track record of growing organically through its own cashflow.
Recent tunneling programs have exposed gently-dipping shear zones with high gold and copper values, Silvercorp noted, and sample results highlights at the LMW mine included a length of 30 metres (m) at 13.95 grams per tonne (g/t) gold, 2.2% copper and 26 g/t silver. That sample was taken at the decline of a 805m elevation in the mine.
With the discovery of the nature of gold-related shear zones from this tunnel work, Silvercorp has now re-examined its database for drill intercepts, particularly with gold grades above 2 g/t, from its previous drilling programs.
Most of these gold carrying intercepts were not mined, it said, as many tunnels advanced horizontally and did not hit these sub-horizontal shear zones.
Now, Silvercorp's ongoing drilling program is targeting gold-bearing zones intercepted by these historic holes, with a total of ten drill rigs at the LMW, TLP and LME mines.
There are three underground rigs and two surface rigs for LMW, three underground rigs for TLP, and two underground rigs for LME.
Shares ticked up 3.61% in New York to stand at $4.30 each.
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