Shares of Silvercorp Metals Inc. jumped Tuesday after the Canadian company that mines for silver in China launched a public relations campaign to vindicate its reputation.
Late last week Silvercorp said an anonymous party accused it of frauds -- for example, allegedly telling the Securities and Exchange Commission it was making money while telling Chinese financial regulators that it was losing money -- and other types of deception. That nameless party also admitted to placing financial bets that the Vancouver-based company's shares will fall, Silvercorp said.
The NYSE-listed company further reported a dramatic increase in the short position of its shares over the past two months to 23 million shares, or 13 percent of the approximately 175 million shares outstanding.
Silvercorp industrial relations manager Laurenn Russell spoke to a number of media outlets vigorously denying the accusations and pointing to the company's release of more than 90 pages of documents on its Web site, according to the Vancouver Sun newspaper.
You would be hard-pressed to see any other public company publishing those documents, Russell told the newspaper. Typically, we wouldn't respond this way to an anonymous allegation. We don't want to over-dramatize the situation.
Silvercorp is working with regulators to identify its accuser, the newspaper said.
Shares of Silvercorp jumped Tuesday nearly 5 percent -- and continued rising after the market closed in after-hours trading -- on unusually heavy trading of about 7.5 million shares. Tuesday's gains followed a 10.46 percent loss on Friday.
On Friday the company's CEO blasted the anonymous accuser.
This type of manipulative scheme is baseless and depresses our share price and harms our shareholders, Dr. Rui Feng said in a statement.
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.
The company was formed as Spokane Resources Ltd. in a merger of Julia Resources Corp. and MacNeill International Industries Inc., under the British Columbia Company Act, on Oct. 31, 1991. It began trading on the NYSE in November 2009.