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Monday, July 26, 2010

Silvercorp Metals (NYSE:SVM) Shares Plunge on Heavy Rains in China

Silvercorp Metals Inc. (NYSE:SVM) plunged in New York and Toronto as the company projected a 10 percent drop in production as a result of abnormally heavy rains at their China "Ying" silver/lead/zinc mining camp.

Over a period of three hours, 217 mm of rain deluged the mining location, flooding three tunnels even with flood control measures in place.

Silvercorp said this in a statement:

“Mining facilities and equipment, such as such as compressors, power switchboards, and transformers at four sites were either flooded or buried by debris washed down from upslope.”

Silvercorp will have to put about $1 million into cleaning up the mess and to repair damaged machinery. The cleanup will take up to 30 days to complete.

The company has four mines in the Ying camp.

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