VANCOUVER, BC (By Silvercorp, 29.Jun.2026, Words: 605) — Silvercorp Metals Inc. announces that further to new nationwide safety measures imposed across the Chinese mining industry, it will experience a temporary slowdown in operations at its Ying and GC mining operations. During this time the company will work with the government regulators as it implements new safety systems and obtains the necessary approvals to resume full operations.
Background
After the recent major accident at a coal mine in Shanxi Province in late May 2026, the State Council and the National Mine Safety Administration issued new comprehensive safety requirements applicable to the entire mining industry, not just limited to coal mines. Chinese regulators classify coal and non-coal mines under a unified mine safety governance system. The fatal accident exposed systemic loopholes, including incomplete personnel positioning and safety monitoring systems, concealed mining areas, and inadequate supervision. Regulators consider these problems to be potential risks that may also exist at non-coal mining sites.
In early June 2026, a national video conference on non-coal mine safety supervision was held and concluded that all metal mines, non-metal mines, underground mines, open-pit mines, and tailings ponds would be required to conduct comprehensive self risk reviews, using the coal mine disaster as a universal warning case. As a result, mine safety authorities launched broad cross-sector inspections to prevent similar catastrophic incidents in metal and non-metal mines. Provincial emergency management departments have immediately expanded the inspection scope to include non-coal mines, while local government leaders and mine safety inspectors carried out unannounced night inspections and underground spot checks at non-coal mines.
For underground mines in China, the main safety facilities are the “Six Major Safety Systems,” which include: (1) safety monitoring, such as air quality, air velocity in tunnels, and video surveillance; (2) personnel positioning; (3) emergency refuge; (4) compressed-air self-rescue; (5) water-supply rescue; and (6) communication linkage systems.
Government inspections have focused on whether the “Six Major Safety Systems” for underground mines have been constructed and completed in tunnels or working faces located in all areas within the mining license boundary. Other focuses of inspection include if the construction of mine facilities have followed the approved design, if a mine has used mining equipment certified with the “Mine Safety” mark, plus other minor safety standards.
Actions Taken by Silvercorp
Silvercorp’s China operations have taken this nationwide safety inspection seriously. Following a self review, operations were suspended at Ying and GC after certain non-compliances with the new regulations were identified across different mines. Five certified vendors have been engaged to complete the “Six Major Safety Systems” at mining levels that are non-compliant. The work is expected to cost approximately US$5.5 million and take approximately 50 days to fully complete.
Concurrently, certain facility improvement and equipment upgrades, such as replacement of flame retardant cables for electricity transfer by halogen-free flame retardant cables, will cost another $6 million.
To reduce extended down time of mines, the governments have also adopted a practical procedure that allows mining companies to resume production at an individual mining level once the “Six Major Safety Systems” and other facilities for that level are completed and have passed inspection and approval. This procedure allows the systems to be completed in phases, enabling mines to gradually resume production while completing work at other mining levels. Due to these major safety system improvement activities, production at the Ying Mining District is expected to be affected by 40% to 50% during the July-September quarter, while production at the GC mine is expected to be affected by approximately 50% over the same time period. For the current quarter, production is expected to be affected by 10 to 15%.
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