Thursday Morning Update

Thu, Sep 1, 2011 - 10:21am

While the site is actually up and running, I thought I'd take a few minutes to create a quick update. It seems that the site is going down with greater frequency these days. However, "with a firm reliance on the protection of Divine Providence", we go forward.

I never did get filled on any new trading positions yesterday. I was hoping to buy some October gold calls but I never quite got the dip I was looking for. I'm going to give it another try today. Since The Cartel usually tries to raid the PMs on the day before the BLSBS report, I like my chances. As you can see on the chart below, a dip toward 1800-1805 looks to be a pretty good buying opportunity.

Silver looks to have stout support just north of 41, in the vicinity of 41.25.

The Turd has a long day ahead so I may not be able to update again until later this afternoon.

Have a great day! TF

About the Author

turd [at] tfmetalsreport [dot] com ()


Dr G
Sep 2, 2011 - 9:12am

I'm also fully ready for the

I'm also fully ready for the Crimex to be up to it's usual shenanigans and drop the metals like they are hot rocks. I'll venture a guess that the Crimex would love to see silver under $41.50 again this morning, and they will do everything they can do place it there. Only question is how much firepower they have in store for us today.

Dr G
Sep 2, 2011 - 9:10am

In regards to WB, I'll take

In regards to WB, I'll take me some $80 silver, but I'm not quite ready for it yet! Must buy more first.

Sep 2, 2011 - 9:09am

What a wonderful World

The way the PMs are charting today makes me want to sing!

<iframe width="420" height="345" src="" frameborder="0" allowfullscreen></iframe>

Sep 2, 2011 - 9:07am

The plot thickens...

Silvercorp Notes Large Short Position in Stock and Receipt of an Anonymous Letter Attempting to Discredit the Company and Manipulate the Share Price Press Release Source: Silvercorp Metals Inc. On Friday September 2, 2011, 8:49 am

VANCOUVER, BRITISH COLUMBIA--(Marketwire -09/02/11)- Silvercorp Metals Inc. ("Silvercorp" or the "Company") (TSX: SVM.TO - News)(NYSE: SVM.TO - News) announces 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 (Source: (, or 13% of the total outstanding shares.

Late yesterday afternoon, the Company 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 Company 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 following allegations made in the anonymous letter:

1. The central allegation is that while Silvercorp reported net profit of US$66 million to the SEC in calendar 2010, financials purportedly available from the Chinese State Administration of Industry and Commerce (SAIC) shows "SVM" reporting a loss of US$0.5 million for calendar 2010. This allegation is false.

The SAIC website (, Attachment A) discloses the following for Silvercorp's four Chinese operating subsidiaries: (i) Henan Found filed net after income tax profit for Calendar year 2010 of RMB514,786,392; (ii) Henan Huawei filed a net loss of RMB6,091,388; (iii) Guangdong Found filed a net loss of RMB4,758,879; and (iv) Anhui Yangtze filed a net loss of RMB1,214,663. On a consolidated basis, the net profit of these four Companies is RMB502,721,462 (US$ 73 million). In addition on the cover of each filed SAIC document there is an anti-fraud code displayed which readers can use to independently verify those reports on the Chinese Certified Professional Accountant website ( Further information to reconcile this China GAAP consolidated total net profit with the US$66 million figure will be posted on the Company's website. The anonymous author's numbers are clearly false.

As further evidence of Silvercorp's net profit, copies of the 2010 Annual Income Tax Filing Forms for Henan Found and Henan Huawei, which include a receipt chop issued by the State Tax Bureau of the Luoning County of Henan Province, is also attached (2010 Income Tax Filing Form, Attachment B). In the 2010 Annual Income Tax Filing Form, Henan Found reported net revenue of RMB964,812,316 (US$140.1 million), and a pre-income tax net profit of RMB590,727,919 and paid income tax payable of RMB74,441,229.

In China, on each sale of goods the seller must charge Value Added Tax, and the receipt issued for the paid value added tax must be approved and is stamped by the government. The Company is posting details on its website showing a reconciliation of the Value Added Tax paid by Henan Found on its revenues along with copies of the government receipts. (Attachment C)

2. The letter further alleges that the Company's cash position is grossly overstated. In fact:

(a) Silvercorp, as at June 30, 2011, had a cash position of $230.5 million - more than all the cash ever raised in the Company's history. Copies of Silvercorp's current bank statements (July 31, 2011) are available on the Company's website. (Attachment D);

(b) Since 2004 Silvercorp has raised in total $202.5 million through equity financings. Over the same period of time it has paid out $40 million in dividends, and has spent $31 million repurchasing its own shares, including $16.5 million in the currently ongoing Normal Course Issuer Bid announced June 17, 2011; and,

(c) The Company has $544.6 million in total assets and no long term debt as at June 30, 2011. 3. The letter also states that the grade of the Company's deposits is simply "too good to be true" compared to comparable companies. The Company acknowledges that its SGX Mine within its Ying mining district does have some of the highest grades in the industry. As disclosed in its most recent NI 43-101 report measured grades at the SGX Ying mine are 845g/t for silver. The mineral resource estimate for SGX was prepared by Mel Klohn L.P. Geol. of Spokane Valley, Washington, who is a Qualified Person with the firm of B.K Exploration Associates. Details of QA/QC procedures and assay lab information are described in the Technical Report filed on SEDAR under the Company's profile and available on the Company's website.

The Company has long established plans for an investor tour to the Ying mine site in the third week of September. All interested investors, analysts and media wishing to visit our mine site and view the ore and operations with their own eyes are asked to contact the Company to join the tour.

4. The anonymous author also alleges that Henan Found's 22.5% JV partner, the Henan Non- Ferrous Geological and Mineral Resources Co. Ltd., which is a state owned enterprise, sold a 5% interest in Henan Found for US$7 million, implying the Henan Found assets are worth only US$140 million. The anonymous author fails to mention that the transfer was to an affiliate. Based on the joint venture contract and articles of association of Henan Found, the 22.5% joint venture partner can assign its interest to an affiliate.

In accordance with good governance practices, the Company has established a task force of independent directors consisting of Dr. Robert Gayton, Paul Simpson, LL.B. and Earl Drake, Canada's former ambassador to China, to work with regulatory authorities to immediately investigate and discover the identity of the party behind these allegations. Silvercorp will pursue all legal options, whether in Canada, the United States, or China, to recover damages incurred by the Company as a result of these allegations.

Dr. Rui Feng, the Company's Chief Executive Officer, noted "this type of manipulative scheme is baseless and which depresses our share price and harms our shareholders. While we are fighting these manipulation schemes, we will continue with our ongoing share buyback program, increase our investor relations efforts, and continue to focus on growth through exploration, acquisitions, and mine development. We are pleased with our current operations and look forward to reporting another profitable quarter."

silver foil hat
Sep 2, 2011 - 9:06am

wb, again

Be afraid, be very afraid!!! 5 minutes ago There is no escape for The Morgue!!!

There is not enough physical silver.

We want to re-emphasize that the equilibrium price for silver is over $80 given the current demand for physical silver.


just passing it along

Sep 2, 2011 - 9:06am


Interesting pre-market trades with SVM....bouncing along that gap fill point now.

Sep 2, 2011 - 9:05am

the future is paved with beTTer days

Eddie Vedder-better days with lyrics

everyday i fEEl bleSSed to be able to live in the "turd" universe...i might have to start geTTing up a liTTle earlier just to read through the blog. no chance today.

i just wanted to aDD that this mornings spike put a smile on my face ;o) could not let yesterday paSS without a PM pickup. i have had that itch this whole wEEk, we did not get that dip, so before we closed the shop last night i got phyZZ...did not want to be stuck with exceSS debt paper this labor day wEEkend...NFP must have bEEn leaked by the lOOks of things on the PM charts. we just had our 3rd blast through 43.

IMVFHO the SILVER train has left the you packed heavy for this trip. $50 9/11 with a close todayabove 43, stiLL in the cards.

stay safe out there.

Sep 2, 2011 - 9:04am

1oz Dragon

If anyone is interested in the 1oz Perth Dragon coins, they are in stock at bullion bourse in Australia.

I believe they offer international shipping but I'm not 100% sure. I know you can find them on if you search for silver bullion, they're the ones that are selling the silver dragons (the only ones I've seen). I've ordered from them within Australia and can vouch for their reliability. I'm not affiliated with them, just thought I'd put it out there for anyone who's interested. I know I was. Peace!

silver foil hat
Sep 2, 2011 - 9:04am
Eric OriginalI Am The Unknown Comic
Sep 2, 2011 - 9:02am


I agree, the GSR will see 30 before 60. I just!!!

hey, nice recipe!!

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