Silvercorp Metals Inc. (TSX:SVM,NYSE:SVM) provided a production update on the Ying Mining District, commenting that in reviewing its operations there it has discovered that “dilutive practices of mining contractors for ore production at Ying Mining District” have contributed to the head grade declines shown in its last two quarterly financial reports. It has now modified the way ore mined by contractors is calculated.

As quoted in the press release:

In August 2013, the Company ordered the contractors to implement the New Method. As a result silver and lead head grades at the SGX mine improved by almost 35% and 21% respectively with an approximate 45% reduction in ore production (a 25% reduction in overall silver metal production) compared to July 2013. The New Method has eliminated significant waste rock resulting in less ore being produced. Additionally, some drillers and miners left the mine sites as they feel that under the New Method their pay would be uncertain, which also caused reduced ore production.
During this transition period the Company expects that ore production with improved head grades may remain at a reduced level for one to two more quarters as the Company is fully implementing the New Method. The Company believes that this will lead to long term cost savings and improved head grades.

Click here to read the full Silvercorp Metals Inc. (TSX:SVM,NYSE:SVM) press release.