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UPDATE: Silvercorp Hits New Yr Low as Notes Large Short Position in Stock, Receipt of Anonymous Letter Attempting to Discredit It

Silvercorp Metals (SVM.TO) has had a roller coaster day with close to five million shares traded. Now it is down 11% at around $7.30, having earlier touched a new year low $6.92. It opened at $7.65 compared to a previous close of $8.23 but then ran up to a day high $8.40 before selling pressure told.

Today it announced that there has been a dramatic increase in the short position of its shares over the past two months which is now approximately 23 million shares, or 13% of the total outstanding shares.

Late yesterday afternoon, the company said it was forwarded a copy of an anonymous letter dated August 29, 2011 addressed to the Ontario Securities Commission, the company's Auditors, and various media outlets maliciously alleging a "Potential $1.3 Billion Accounting Fraud at Silvercorp". The anonymous author also stated that his firm held a short position in the company's shares and intended to make his concerns known through internet postings. The cCompany has not confirmed whether the letter has been disseminated to all the addressees or if any postings have been made.

"Recognizing that the anonymous letter may be disseminated the company wishes to proactively respond to the most serious allegations and has posted supporting information on its website to provide investors with comfort regarding the allegations made in the anonymous letter," it said.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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