Silvercorp acquire a small gold mining company in China for US$22.8 million

Silvercorp Metals Inc. said Monday that, through a 77.5%-owned subsidiary, it has made a deal to acquire a small gold mining company in China for US$22.8 million.

While the size of the deal is small, it’s the first since the Vancouver precious-metals miner was targeted this fall by a group of anonymous short-sellers who alleged fraud at the company’s operations in China.

An aggressive campaign by Silvercorp and its chief executive, Rui Feng, to fight back against the allegations helped the stock regain some of the losses sustained since the company acknowleged its struggle with the short-sellers in early September.

Silvercorp’s shares are weaker Monday amid a broader retreat in silver equities, falling 5.9% to C$7.63 in recent trading on the Toronto Stock Exchange.

Silvercorp said the deal for SX Gold, a small company with a silver-gold mine, represents its continuing effort to consolidate mining properties in the area near Louyang City in Henan province, part of the largest silver-producing region in China.

Silvercorp said it intends to resume mining at the mill to stockpile ore in preparation for the completion of a mill upgrade in February. It also plans an exploration program for the area that will bring its resource estimate in compliance with international standards. – MarketWatch

Tags: Silver, silver mining, silver mining companies, silver mining industry, Silvercorp

Posted by VBN on Nov 27 2011. Filed under Gold. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry