Silvercorp acquires Silver-Lead-Zinc resources in Southern China

Silvercorp Metals Inc. has completed the purchase from Yangtze Gold Ltd. (Yangtze Gold), a private BVI company, of all of the issued shares of Yangtze Mining Ltd.

(Yangtze Mining). Yangtze Mining owns a 95% interest in a Sino-Foreign joint venture company, Anhui Yangtze Mining Co. Ltd. (Anhui Yangtze), which owns 100% of the Gaocheng (GC) and Shimentou (SMT) silver, lead and zinc exploration permits located in Guangdong Province, People’s Republic of China.

The purchase price for the shares of Yangtze Mining is about C$61.95 million and will be paid 40% in cash and 60% in common shares of Silvercorp.

To date 20% of the purchase price amounting to about C$12.39 million has been paid with the remaining 20%, plus interest at 5.5% on that amount, payable when Silvercorp receives its next dividend payment from its Chinese subsidiary Company, or within 3 months, whichever is earlier.

The 60% common share portion of the purchase price was paid by issuing 4,532,543 common shares of the Company.

The transaction has been approved by the independent directors of the Company in accordance with applicable regulations, a NI 43-101 independent technical report has been completed on the Permits by SRK Consulting China Ltd. and a fairness opinion and was received by the independent directors.

The Company has taken over the operation of Anhui Yangtze, is currently applying for a mining permit, and plans to spend $1.5 million to complete approximately 10,000 metres of drilling this fiscal year.

With the purchase of the GC and SMT Properties, Silvercorp expects to realize the benefits of growth in resources and near term production from a new mining camp in a different province, and establishes a new base for further consolidation of the GC silver, lead, zinc mining district.