Silvercorp Temporarily Scales Back China Production Amid Nationwide Mine Safety Inspections

• Silvercorp will experience a temporary production slowdown at its Ying and GC mining operations in China as it works with regulators to implement new nationwide safety requirements.
• The inspections follow a major coal mine accident in Shanxi Province in late May 2026, after which Chinese authorities extended safety reviews to all metal and non-metal mines, not just coal operations.
• Five certified vendors have been engaged to complete the "Six Major Safety Systems" at non-compliant mining levels, at an estimated cost of US$5.5 million over approximately 50 days.
• A further US$6 million has been allocated for facility and equipment upgrades, including the replacement of cables with halogen-free, flame retardant alternatives.
• Production is expected to be affected by 40 to 50 percent at the Ying Mining District and approximately 50 percent at the GC mine during the third quarter of 2026, with a smaller 10 to 15 percent impact expected in the current quarter.

Silvercorp Metals Inc. (TSX/NYSE American: SVM) is a Canada-based mining company that produces silver, gold, lead and zinc, with its operating mines located in China. The company's strategy centres on generating free cash flow from long-life mining assets, growing its resource base through exploration drilling, pursuing mergers and acquisitions, and maintaining a commitment to responsible mining and environmental, social and governance practices.

Temporary Production Slowdown at Ying and GC Mines Due to Nationwide Mine Safety Inspections

Following the coal mine accident in Shanxi Province in late May 2026, China's State Council and National Mine Safety Administration introduced new safety requirements covering the entire mining industry. The accident revealed gaps including incomplete personnel positioning and monitoring systems, concealed mining areas, and weak supervision, which regulators determined could also apply to non-coal operations.

In early June 2026, a national conference on non-coal mine safety directed all metal mines, non-metal mines, underground and open-pit operations, and tailings facilities to carry out comprehensive self risk reviews. Provincial authorities subsequently widened inspection activity to non-coal sites, including unannounced night inspections and underground spot checks.

Silvercorp conducted an internal review in response to the expanded requirements and identified certain non-compliances at mining levels within the Ying and GC operations. As a result, the company suspended production at the affected levels while it works towards compliance.

Implementation of Six Major Safety Systems Following Shanxi Coal Mine Accident

Underground mines in China are required to maintain the "Six Major Safety Systems." These cover safety monitoring such as air quality and video surveillance, personnel positioning, emergency refuge stations, compressed air self-rescue equipment, water supply for rescue operations, and communication linkage systems. Inspectors are assessing whether these systems are fully built out across every tunnel and working face within a mine's licensed boundary.

To bring the Ying and GC operations into compliance, Silvercorp has engaged five certified vendors to complete the required systems at the non-compliant mining levels, at an estimated cost of US$5.5 million and a completion timeline of approximately 50 days.

Separately, the company is investing a further US$6 million in facility and equipment upgrades, including the replacement of standard electrical cables with halogen-free, flame retardant versions.

Estimated 40-50% Production Impact at Ying and GC During Q3 2026

Silvercorp expects the safety upgrade work to affect production at the Ying Mining District by 40 to 50 percent and at the GC mine by approximately 50 percent during the July to September quarter. The impact in the current quarter is expected to be more limited, at 10 to 15 percent.

Chinese regulators have adopted a procedure that allows individual mining levels to resume production once their safety systems have been completed and pass inspection, rather than requiring all levels to remain suspended until the full programme is finished.

The production impact described is linked to the completion of the safety compliance work and the associated inspection and approval process at each mining level.

Milestones and Next Steps

The completion of the Six Major Safety Systems within the estimated 50 day period, and the subsequent inspection and approval of individual mining levels at Ying and GC, represent the key steps ahead for Silvercorp's China operations. Production at each level is expected to resume progressively as it receives regulatory approval, with the company continuing to work with government regulators throughout the process.

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