Silvercorp sets records in China as it emerges from short and distort saga
Silvercorp Metals along with the rest of the silver sector jumped on Thursday as the price of the precious metal recovered from year lows.
Ahead of announcing annual financials results that showed record production of 5.6 million ounces and cash flows of $123 million the Vancouver-based company shot up 7% to close at $5.51.
Despite today's gains, paying handsome dividends and a share buy-back program Silvercorp is still trading not far off three-year and is down a whopping 66% from a record stock price just shy of $16 hit in April last year.
Wild swings in silver stocks are common but Silvercorp, the number one silver miner in China, has had an especially torrid year after a short and distort saga that began in September 2011.
It closed at $8.23 September 1, the day before the announcement of an anonymous letter alleging $1 billion fraud at the company over silver production and the revelation of a short position of 23 million shares or 13% of the outstanding stock.
One of the most dramatic days was Wednesday September 14 when more than 10 million shares were traded against an average of less than 1 million before the whole debacle: the share bounced between a low of $5.81 and a high of $7.42. This was a day after it lost 21% of its value. A month later it gained 19% in a single session when a forensic audit by KPMG exonerated the company.
Silvercorp is currently suing the alleged scammers which include Chinastockwatch.com and Alfredlittle.com in New York and has retained independent consultants to confirm resource estimates at four of its properties. The company said today that pursuing the legal action and the audits have already cost it $3.9 million.
The company is now worth $940 million on the Toronto bourse. It operates four silver-lead-zinc mines in Henan province and is also advancing a silver project in northern British Columbia, Canada.
Click here for Silvercorp's detailed set of results for the year ended March 31, 2012.