Silvercorp Metals Inc. Formally Commences Offer to Acquire All of the Outstanding Shares of Klondex Mines Ltd.

Silvercorp Metals Inc. Formally Commences Offer to Acquire All of the Outstanding Shares of Klondex Mines Ltd.

Silvercorp Metals Inc. announced that it has formally commenced its offer to acquire all of the outstanding common shares of Klondex Mines Ltd. (“Klondex”). Silvercorp will today deliver to Klondex’s principal office and file with the Canadian securities regulators and with the SEC its formal offer and take-over bid circular (together, the “Circular”). The circular will be sent to Klondex shareholders shortly following Silvercorp’s receipt of Klondex’s shareholder list, which was formally requested on June 5, 2009.

On June 5, 2009, the last trading day prior to Silvercorp’s announcement of its intention to make the Offer, the closing prices of the Silvercorp common shares were C$4.36 on the TSX and $3.86 on the NYSE Amex, respectively and the closing price of the Klondex common shares was C$1.37 on the TSX.

Pursuant to the offer, Klondex shareholders will be entitled to receive 0.50 common shares of Silvercorp for each Klondex common share validly tendered to the offer, representing approximately C$2.18 per Klondex common share (based on Silvercorp’s closing share price as at June 5, 2009). The offer represents a premium of 59% to Klondex’s closing share price as at June 5, 2009 (based on Silvercorp’s closing share price as of the same day), and a premium of 63% to Klondex’s 20-day volume weighted average price as at June 5, 2009 (based on Silvercorp’s 20-day volume weighted average price as of the same day).

The offer will be open for acceptance until 5:00 p.m. (Eastern Daylight Time) on July 21, 2009, unless extended or withdrawn. The offer will be subject to certain conditions including a minimum tender threshold of 66 2/3%, receipt of all required regulatory approvals and third-party consents, the absence of any material adverse change in Klondex, the absence of certain prohibited activities on the part of Klondex (including share issuances, material debt issuances, acquisitions and dispositions) between the date hereof and the expiry of the offer, no untrue statements or omissions in Klondex’s public disclosure and Klondex’s shareholder rights plan being waived, invalidated or cease traded. Silvercorp intends to take all necessary steps to acquire any Klondex shares that remain outstanding following the expiry of the offer. Full details of the offer are included in the Circular.

Investors may obtain a free copy of the Circular and other documents filed by Silvercorp with the Canadian securities regulators at www.sedar.com and with the SEC at the SEC’s website at www.sec.gov. The Circular and other documents may also be obtained for free from Silvercorp’s website or by directing a request to Silvercorp’s investor relations department by telephone at 1-888-224-1881, fax 604-669-9387 or e-mail info@silvercorp.ca or by contacting the Information Agent, Kingsdale Shareholder Services Inc., toll free at 1-888-518-6832.

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