CHINA - Silvercorp nets US$43 million from Henan dividend

Silvercorp Metals has banked a US$43 million cash dividend from its 77.5%-owned Chinese subsidiary Henan Found Mining’s 2010 profit distribution. Henan’s audited statutory financial statements confirm a RMB514.8 million profit in 2010, with the board of directors declaring 75% of that as cash dividends to its two shareholders. The dividend has been deposited into a Canadian bank.

Meantime, Silvercorp has employed two internationally recognized consultants to prepare the NI 43-101 reports on four of its properties. Canada’s AMC Mining Consultants is already nearing completion of a pre-feasibility study on the GC project in Guandong province and will now prepare the updated NI 43-101 reports for the Ying property in Henan province and the BYP project in Hunan province. Golder Associates will update the company’s Silvertip NI 43-101 technical report.

These new independent reports will include additional exploration and development work completed on the respective properties during the last fiscal year. During 2011 there was 186,627 metres of underground and surface drilling completed at the properties. The NI 43-101 reports are all due for completion by the third quarter of 2012.

Silvercorp also wants to ensure the new independent reports will alleviate concerns that may linger from the third party allegations circulated in 2011 regarding the company and its properties.

Silvercorp’s chairman Rui Feng says Chinese law authorities have started a criminal investigation to identify those responsible for fraudulent and false reports about Silvercorp and its Chinese subsidiaries that were circulated on the internet and in letters to the media.

Rui Feng says the company has filed a lawsuit in the New York County Supreme Court charging Chinastockwatch.com, Jerry Katz, Alfredlittle.com, Alfred Little, Simon Moore, and several ‘John Doe’ defendants with spreading “false, defamatory and fraudulent” information about Silvercorp. It has also filed two separate actions in British Columbia, Canada.

The company, which is the largest primary silver producer in China, continues to receive disconcerting calls from anonymous or fraudulent people who it believes are trying to spread false and defamatory information about Silvercorp, or attain insider trading information.

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