Silvercorp Statement From Chairman
October 25 2011 - 4:00PM
Marketwired
Silvercorp Metals Inc. (TSX:SVM)(NYSE:SVM) ("Silvercorp" or the
"Company"), of Vancouver, Canada, provided additional comments from
its Chairman, Dr. Rui Feng, following receipt of the KPMG Forensic
Inc. ("KPMG") report, commissioned by its Special Committee (the
"KPMG Report") which was disclosed by Silvercorp yesterday.
Statement by Dr. Rui Feng, Chairman, and Chief Executive
Officer:
Immediately following the receipt of an anonymous, threatening
letter on September 1, 2011, Silvercorp provided comprehensive and
detailed information to refute the anonymous allegations and rumors
contained in the letter and subsequent electronic communications.
These ill-founded claims, made by admitted short sellers, were
intended to manipulate Silvercorp's share price and harm the
Company and its shareholders. The Company is of the view that the
KPMG Report released yesterday provides thorough, independent
confirmation that the substance of the anonymous allegations
addressed in the KPMG Report has no merit (the details of the KPMG
Report were released by press release on October 24, 2011).
We have fought hard against the anonymous short-sellers' scheme
to malign our Company and profit from their short positions. To
reassure the market, our board formed a Special Committee, who,
among other things, retained the services of KPMG to conduct an
independent investigation into the matters addressed in the KPMG
Report. The forensic accounting investigation into the matters set
out in the KPMG Report was extensive and expensive. From September
6, 2011 when they were retained, until the final report was
finished, KPMG expended over 2000 man-hours on the forensic work
carried out in Canada and China. Total expenditures to date for
fighting this manipulation scheme are estimated at $2 million
dollars which includes KPMG Forensics' fees, plus bills for the
Special Committee and its independent legal counsel, and other
costs.
In addition to monetary costs, my focus and that of my entire
management team has been almost completely distracted from our
normal business operations over the last two months. Employees at
every level of our operations have been concerned and worried with
what has happened to Silvercorp, and what may happen to the Company
in the face of such serious and nefarious accusations. Fighting
this battle has been exhausting! We have demonstrated that there is
no fraud at Silvercorp, that we have been unfairly targeted, and
that we are the victim of a classic "short and distort" scheme.
We have gone above and beyond all reasonable efforts to deal
with this "short and distort" manipulation scheme. The facts and
data are available. Our books have been properly audited, we have
now been forensically examined as provided in the KPMG Report, and
all our transactions have been fully disclosed. There is absolutely
no substance to the anonymous allegations. Moving forward we will
refocus and concentrate on our business of mining, mine
development, and exploration, things that build value for our
shareholders.
While we will focus on building value for our shareholders going
forward, many questions remain to be answered. (1) Who are the
anonymous short sellers behind this short and distort scheme? (2)
Who will compensate the Company for the substantial monetary and
non-monetary losses incurred to defend ourselves against these
non-recourse allegations and rumors? (3) Who will compensate
shareholders who were frightened into selling their shares at a
loss? (4) How will market integrity be protected from this kind of
anonymous short and distort scheme so that no other legitimate
companies and their shareholders will be hurt by a similar scheme
again?
In closing, we are grateful to our shareholders and employees
who stood faithfully by Silvercorp through the last difficult two
months. We are also grateful for our Special Committee members
whose normal lives and busy schedules were interrupted to
investigate the short sellers' anonymous allegations in a timely
manner.
About Silvercorp Metals Inc.:
Silvercorp Metals Inc. is engaged in the acquisition,
exploration, development and mining of high-grade silver-related
mineral properties in China and Canada. Silvercorp is the largest
primary silver producer in China through the operation of the four
silver-lead-zinc mines at the Ying Mining Camp in the Henan
Province of China. The Company is developing its GC
silver-lead-zinc mine in the Guangdong Province and recently
acquired the BYP gold-lead-zinc mine in Hunan Province. In Canada,
Silvercorp is preparing to apply for a Small Mine Permit for the
Silvertip high grade silver-lead-zinc mine project in northern
British Columbia to provide a further platform for growth and
geographic diversification. The Company's shares are traded on the
New York Stock Exchange and Toronto Stock Exchange and are included
as a component of the S&P/TSX Composite and the S&P/TSX
Global Mining Indexes.
Contacts: Silvercorp Metals Inc. Rui Feng Chairman/CEO (604)
669-9397 or Toll Free: 1-888-224-1881 Silvercorp Metals Inc. Lorne
Waldman Corporate Secretary (604) 669-9397 or Toll Free:
1-888-224-1881 (604) 669-9387
(FAX)info@silvercorp.cawww.silvercorp.ca
Silvercorp Metals (TSX:SVM)
Historical Stock Chart
From Apr 2024 to May 2024
Silvercorp Metals (TSX:SVM)
Historical Stock Chart
From May 2023 to May 2024