VANCOUVER – Silvercorp Metals Inc. (TSX:SVM)(NYSE:SVM), a Vancouver miner which operates primarily in China, says its fiscal fourth-quarter profits fell 19 per cent as it booked $1.5 million in audit and legal fees in an attempt to fend off allegations of fraud.
The company, which has been fighting fraud allegations for much of the last year, said net income attributable to shareholders fell to $9.7 million, or six cents per share. That was down from $12 million, or seven cents per share, in the year-earlier quarter.
Revenue grew four per cent to $44.3 million from $42.4 million.
Silvercorp produced 1.1 million ounces of silver in the quarter, compared to 1.0 million ounces in the quarter of 2011. However, production costs and general and administrative costs dragged on its results.
For the full 2012 fiscal year, the company reported record net income of $73.8 million, or 43 cents per share, an increase of nine per cent from the $67.7 million, or 40 cents per share, in year ended March 31, 2011.
It also booked record full-year revenue of $238 million, up 42 per cent from $167.3 million in fiscal 2011.
Get weekly money news
The company said its 2013 outlook is unchanged from an earlier guidance that its silver production will grow by 20 per cent and its gold output by 90 per cent in the next fiscal year, which ends March 31, 2013.
In addition, it said lead output will rise 12 per cent and zinc production will increase 63 per cent.
For fiscal 2013, Silvercorp also plans to spend about $89.1 million for mine development, mill construction, and other capital items. In addition, the company will spend $9.8 million on exploration.
Silvercorp has a lawsuit against several companies and individuals accusing them of spreading lies about the mining company as part of a short-selling stock manipulation scheme.
Shares in Silvercorp dropped by as much as 20 per cent in a day last year after anonymous letters were sent to B.C. and Ontario securities regulators and comments were posted on websites alleging Silvercorp had overstated its financial statements and resource deposits.
The company has repeatedly denied any wrongdoing and alleged that it was the victim of a smear campaign designed to drive down the value of its shares.
Silvercorp is the largest primary silver producer in China with four silver-lead-zinc mines at the Ying mining district in Henan province. In addition to its operations in China, Silvercorp is developing the Silvertip project in northern British Columbia.
The company bought the project from Silver Standard in 2010 for $15 million in cash and shares.
Companies that operate in China but list on foreign stock exchanges have been under the microscope following accusations against Chinese timber company Sino-Forest Corp. (TSX:TRE) by short-seller Muddy Waters Research.
Shares in the company, which reported its results after markets closed, added seven per cent or 36 cents to close at $5.51 on the Toronto Stock Exchange.
Comments
Want to discuss? Please read our Commenting Policy first.