Silvercorp Notes Large Short Position in Stock and Receipt of an Anonymous Letter Attempting to Discredit the Company and Manipulate the Share Price

Silvercorp Metals Inc. SVM announces that there has been a dramatic increase in the short position of its shares over the past two months which is now approximately 23 million shares - Source: (http://www.dataexplorers.com/products/data) - or 13% of the total outstanding shares. Late yesterday afternoon, the Company was forwarded a copy of an anonymous letter dated August 29, 2011 addressed to the Ontario Securities Commission, the Company's Auditors, and various media outlets maliciously alleging a "Potential $1.3 Billion Accounting Fraud at Silvercorp". The anonymous author also stated that his firm held a short position in the Company's shares and intended to make his concerns known through internet postings. The Company has not confirmed whether the letter has been disseminated to all the addressees or if any postings have been made. Recognizing that the anonymous letter may be disseminated the company wishes to proactively respond to the most serious allegations and has posted supporting information on its website to provide investors with comfort regarding the following allegations made in the anonymous letter: