Received Tuesday Aug. 07,2012
Bottom Line: Silvercorp is a solid,well run operation. Buy.
PDF with Photos
"Louis James just returned from China, and here’s what he reported about his
visit to Silvercorp…
I spent some time with XL honoree Rui Feng in China, discussing China and mining in general, as well as Silvercorp’s growth and challenges. I also went to check out the construction of Silvercorp’s GC mine with Myles Gao, Silvercorp’s president and COO. I believe GC will add substantial value, but more on that in a moment.
A quick note on Myles. During the whole time I was with him, he was absolutely straight with me, frankly discussing various issues Silvercorp has and how they intend to deal with them. They need more power on site at GC, for example – it’s a limitation at present – but they are working on more than enough additional
power and backups. They discovered some new veins while building a water-diversion tunnel at GC, but Myles doesn’t think they are continuous enough to be mined. And so forth.
I mention this because Myles was recently attacked by one of Silvercorp’s detractors for stumbling over some historic resource figures in a speech. I won’t link to the nonsense, because the critics don’t deserve
the attention. The whole idea of the criticism was silly; historic (non-43-101) figures shouldn’t be relied upon anyway, and they have no bearing on the current 43-101-compliant resource figures, based on many hundreds of drill holes. Anyone can forget a number while on the podium – it’s meaningless. For the
record: I believe Myles is an honorable man and a competent mining executive."
"The mill should be operational by September, and mine development should enable production by November – though, of course, we should expect a ramp-up of production as field optimization and debugging proceeds through the commissioning process. Myles and the crew have done this before; I believe the mine will be completed on time and on budget."