“Our strategy has been to acquire projects and develop mine operations quickly in order to generate profit before the project’s potential is fully drilled off. Cash flow from our operations is used to fund further exploration, resource expansion and production ramp up.”

Rui Feng

CHAIRMAN AND CEO, SILVERCORP METALS INC.

May 27, 2019

How has Silvercorp Metals managed to maintain high levels of profit despite difficult market conditions?

The key behind Silvercorp Metals’ success is our excellent internal management. Our team consists of technical personnel, engineers and geologists who have extensive experience within the mineral resources industry. Silvercorp Metals’ approach is different from its competitors: our strategy has been to acquire projects and develop mine operations quickly in order to generate profit before the project’s potential is fully drilled off. Cash flow from our operations is used to fund further exploration, resource expansion and production ramp up. As of January 2019, the company has over US$125 million in the treasury, and we plan to grow the business further through consolidation, exploration, mine development and acquisition.

What were the contributing factors behind the improvement of metal grades at Silvercorp Metals’ four operating mines in the Ying mining district?

Over the last few years, Silvercorp Metals has experienced a significant improvement in the grades of silver, lead and zinc resources at its operating mines. The improvement in grades can be partially attributed to an innovative productivity management tool, “Enterprise Blog,” which we implemented in Q2 2016 with the goal of increasing head grades and minimizing dilution through improved efficiencies.

Can you elaborate on the benefits of the Enterprise Blog management system?

The Enterprise Blog is a digital cloud system that enables the distribution and flow of information. Everyone in the company, regardless of position, is required to load onsite inspections onto the system, which is then listed in a structured data format containing information and supporting photos. The management team can then access information directly on the blog in real time. The Enterprise Blog system allows information collection, distribution, retrieval and monitoring to become transparent and immediate. Assessment of information and knowledge can now flow freely, allowing for more accurate and faster decisions to be made.

How significant is the production capacity from Silvercorp Metals’ two centralized mills?

Silvercorp Metals owns and operates two floatation mills with a total capacity of a combined 3,200 tpd producing silver-lead and zinc concentrates that are sold to six smelter customers located within a 200 km radius. During the milling process, the minerals are separated by a series of flotation circuits, producing a lead concentrate (carrying the silver) that averages 69% lead and a zinc concentrate that averages 52% zinc. The concentrates are of premium quality, containing very little deleterious elements. Metal recoveries to date have averaged over 95% for lead, 94% for silver and 72% for zinc, exceeding the expectations from the design specifications.

Which policies has Silvercorp Metals introduced that highlight the company’s commitment to the environment, as well as safety in production?

Silvercorp Metals recognizes that its success is driven by the welfare of its labor force and the environment that supports its growth. We have voluntarily built a water pipeline to mitigate risks of environmental damage from flooding, and we operate a zero-discharge mill. We have always given priority to environmental protection and safety in production, and this was recognized as we were awarded “The National Green Mine Pilot Enterprise” by the Ministry of Land and Resources in China.

Silvercorp Metals recently invested US$23 million for a 30% stake in in New Pacific Metals Corp. What potential do you see in its Silver Sand project in Bolivia?

We believe that the Silver Sand project has the potential to become a world-class deposit. The drilling results were released on January 22, 2019 and February 20, 2019, with a remarkable 190 out of 195 holes having returned attractive grades, the highlights of which included 99.91 m of 244 g/t silver. Drilling activities will continue in 2019 to build a resource estimate. Pan American Silver, which has operated the San Vicente silver mine in Bolivia since 1999, is also a shareholder of New Pacific.

What are Silvercorp Metals’ strategy and objectives moving forward?

Silvercorp Metals’ strategy is to continue to grow the company, increase existing resources organically through drilling and acquire high grade projects with defined resources that can quickly be brought into profitable operation with reasonable capital expenditures. We also intend on bringing the BYP mine back into production, with an expectation of 30,000 oz of gold per annum.

We have accomplished a great deal to bring value to our shareholders, having paid over US$99 million in dividends to date. We are prudent operators and focused on remaining profitable, recognizing the importance of benefiting all stakeholders, including local communities and government.

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