Santacruz Silver Mining reports fatality at Tres Amigos mine in Bolivia
Tres Amigos mine, a part of the Caballo Blanco Group of mines, has resumed operations after it was shut down following the incident.
Shares in China-focused miner Silvercorp Metals slumped over 7% on Monday after British Columbia security regulators said they were joining the investigation into an anonymous letter accusing the company of a $1.3 billion fraud.
Silvercorp was forced on Friday 2 September to make public the letter and at the same time disclosed that someone had built up a short position of 23 million shares – more than 13% of the number outstanding. The firm with projects in China and Canada plunged after the news broke and Monday’s drop brings year to date losses close to 40% despite the firm’s ongoing buyback programme.
Silvercorp Metals (TSE:SVM) ended Monday down 7.27% at $7.78 amid heavy volumes on a generally bad day on the Toronto bourse. The Vancouver-based company has 175 million shares outstanding and is worth $1.36 billion. The counter touched a record high of C$15.60 in April as the precious metal reached all-time highs.
Silvercorp is the latest in a string of Canadian companies with Chinese backing and operations being accused of fraud with Sino-Forest the most high-profile case. Last week the forestry firm’s suspension on the TSX was extended to January 2012 after the Ontario Securities Commission said the fraud allegations may have some merit.
Silvercorp said in a statement the British Columbia Securities Commission, in a departure from their usual policy of keeping investigations confidential, announced on Friday that in order to conduct a balanced and thorough review it is publicly asking the author of the anonymous letter to come forward.
“We see this as an important first step towards mitigating the damage done to Silvercorp’s reputation,” said Dr. Rui Feng, Silvercorp’s CEO. Silvercorp has also established a task force of independent directors consisting of Dr. Robert Gayton, Ph.D. in Accounting, Paul Simpson, LL,B. and Earl Drake, Canada’s former ambassador to China to work with regulatory authorities to investigate and discover the identity of the party behind these allegations.
Silvercorp on Monday also updated investors of its buyback programme saying it has acquired a total of 2,318,012 of its common shares at an average price of CDN$8.12 out of a total of up to 10 million common shares.
Investment site Motley Fool asked last week whether Silvercorp is the perfect stock:
Silvercorp stands out from the crowd because of its low production costs. Unlike smaller companies such as Great Panther Silver (AMEX: GPL) and Endeavour Silver (NYSE: EXK), Silvercorp actually boasts negative cash production costs once you factor in the value of incidental gold and base metals obtained during the silver-mining process. That means every ounce Silvercorp mines is pure profit.
