BMO Capital Markets Maintains Outperform, $11 Target on Silvercorp Metals

BMO Capital Markets reiterates its Outperform, $11 Target on Silvercorp Metals

as the company annoucnes results of a pre-feasibility study for its GC development project located in southern China, which may require higher capital investments for less production than previously planned. BMO Capital Markets notes, "The PFS outlines development of a 1.6ktpa underground mine and processing plant for an initial capital cost of US$67.4M. Reserves of 18.5Moz of silver, 62kt of lead and 140kt of zinc support a 10.5-year mine life and annual production of ~1.1Moz of silver, 5kt of lead and 11.8kt of zinc with initial production expected in Q3/12. ...While the PFS parameters are largely in line with those contemplated by BMO Research, key differences include 34% lower production driven by a 23% decline in the reserve grade and +50% higher initial capital requirements." SVM closed at $8.26 a share yesterday.