#Canada #Vancouver #Silvercorp Metals #Safety Regulations #Chinese Mining

Silvercorp Metals Inc. Updates on Operations in China

Silvercorp Metals Inc., a notable player in the mining sector, recently announced a temporary slowdown at its Ying and GC mining sites in China. This decision follows the introduction of new national safety regulations affecting the mining industry as a whole, which were implemented in response to a tragic coal mine accident in Shanxi Province in late May 2026.

Background to the New Safety Measures

In the aftermath of the aforementioned incident, the Chinese State Council along with the National Mine Safety Administration established stringent safety protocols that extend beyond coal mines to encompass all sectors of mining. Investigations revealed critical safety loopholes, including incomplete personnel positioning, inadequate safety monitoring systems, concealed mining areas, and a lack of supervision—all presenting significant risks at non-coal extraction sites as well.

During a national conference held in early June, regulators emphasized the necessity of conducting comprehensive self-risk reviews across all mining operations in light of the coal mine disaster. Consequently, safety authorities initiated inspections aimed at fortifying operational safety in both metal and non-metal mines. Local government officials and inspectors have intensified night inspections and unannounced checks to ensure compliance with the new safety requirements.

The safety overhaul focuses on the implementation of the 'Six Major Safety Systems' at underground mining operations. These systems encompass:
1. Safety Monitoring: This includes monitoring air quality, tunnel air velocity, and surveillance.
2. Personnel Positioning: Assuring the presence and location of all personnel within the mines.
3. Emergency Refuge: Establishing safe zones for emergencies.
4. Compressed-Air Self-Rescue: Enabling miners to assist themselves during air supply failures.
5. Water-Supply Rescue: Preparations for potential water-related emergencies.
6. Communication Linkage Systems: Ensuring constant communication during emergencies.

The government's inspections target each aspect of these safety systems, ensuring they adhere to the approved designs and utilize mining equipment meeting the ‘Mine Safety’ mark, along with various other safety standards.

Impact on Silvercorp's Operations

Silvercorp takes the implementation of these national safety inspections very seriously. Following a thorough internal review, the company suspended operations at their Ying and GC mining sites upon identifying certain discrepancies with new compliance regulations. To address these non-compliances, Silvercorp has contracted five certified vendors to ensure the 'Six Major Safety Systems' are properly installed and operational at the affected mining levels. This undertaking is projected to cost approximately $5.5 million and will require about 50 days for full completion.

In addition, the company is also making further investments for facility enhancements and equipment upgrades, which include the replacement of electrical cables with halogen-free flame retardant alternatives, anticipated to cost around $6 million.

The regulatory framework now allows mining companies to resume operations progressively at individual mining levels once the necessary safety systems are in place and pass inspection. Consequently, Silvercorp expects production at the Ying Mining District could see declines of between 40% to 50% during the third quarter, while the GC mine is projected to face a similar reduction of approximately 50%.

Initially, for the ongoing quarter, production is expected to be impacted by roughly 10% to 15%.

About Silvercorp

Silvercorp Metals Inc. is a Canadian mining organization engaged in the production of silver, gold, lead, and zinc. With a longstanding history of profitability and potential for future growth, the company's strategy is anchored in generating free cash flow from its long-life mines and focusing on organic growth through dedicated exploration programs. Additionally, Silvercorp is actively engaged in mergers and acquisitions to unlock further value while maintaining a robust commitment to responsible mining practices and sustainable environmental, social, and governance (ESG) policies.

For further details, visit Silvercorp Metals.