NHsorter wrote:Any idea why it is dropping while silver is popping?
SILVERCORP METALS (SVM-TSX; SVM-NYSE) ANDREW KAIP, P.GEO.
Brief Research Note
Rating: Outperform
Price: $8.23
Target: $17.50
Title: Proactively Defends Itself Against Short Seller
Impact: Positive
Details & Analysis: Silvercorp announced that it has received an anonymous letter accusing it of a $1.3 billion accounting fraud. The letter was forwarded to SVM late yesterday afternoon by its auditors. The central allegations are that: 1) SVM misrepresented its 2010 calendar year profit of US$66 million, 2) the company’s cash position is grossly overstated, and 3) grades at the Ying mine are “too good to be true.” SVM has denied the allegations and provided supporting documentation on its website to support its position. The press release provides links to Chinese government websites, which demonstrate that the company declared a RMB502 million (~US$73 million) profit over calendar year 2010. SVM provides bank statements from Canadian and Chinese institutions outlining total cash holdings and short-term investments of ~US$221 million. As at the June 30, 2011 quarter end, SVM reported cash and short-term investments of US$230.5 million, with the difference explained through ongoing operating profits offset by the ~$US17 million the company has recently spent repurchasing its own common shares. Current cash on hand exceeds the total amount of equity funding raised by SVM (US$202.5 million) since 2004. Over this timeframe, SVM has paid shareholders ~US$40 million in dividends and has spent US$31 million repurchasing shares. BMO views the company’s proactive approach toward disclosure to repudiate allegations of fraud as a positive step. BMO reiterates SVM’s Outperform rating and views weakness in the share price as a rare buying opportunity.
When in the Course of human events it becomes necessary for one people to dissolve the political bands which have connected them with another and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them... (Thomas Jefferson)
Expect this baby to explode in a few days
