Shares of Silvercorp Metals Inc., battling anonymous charges of accounting fraud, shot higher Thursday -- despite a share price downdraft among other precious metals miners -- after announcing a stock buyback and a cut in the number of shares outstanding.
Silvercorp, based in Canada but operateing almost exclusively in China, said it bought 3.92 million of its common shares at a total cost of $31.29, or an average price of $7.97 (Canadian) per share. The company said it intends to acquire up to 10 million common shares. All shares in the buyback will be cancelled.
The company has about 175.06 million shares outstanding.
The stock shot up in afternoon trading 9.1 percent, or 59 cents, to $7.08. In the last 52 weeks the stock has ranged from a low of $6.50 to a high of $7.23.
The company is purchasing its owns shares because it believes that prevailing market conditions have resulted in Silvercorp's shares being undervalued relative to the immediate and long term value of Silvercorp's portfolio of producing and development properties in China and Canada, the company said in a statement.
The company's stock has plunged 44.5 percent in the last six months as reports circulated that Silvercorp falsified production and income reports. Some of the authors of those reports acknowledged shorting Silvercorp. The company has denied all accusations of deception and vowed to pursue legal remedies against its accusers.