via Financial Post - Short Selling Silvercorp.

If the company has been defrauding investors, a small group of insiders are involved are profiting at the expense of the shareholders, from whom they raised capital to advance the project.

Equity swap holders who do not have any claim on the company and first sold shares without owning any, are sure to be the group most liable for losses, should the company manage to achieve their expansion plans and raise capital by digging money out of the ground.

The assets are very real, but the shares have languished for years. Financial assets are clearly being held in the liabilities column on the balance sheet, enough to develop into a mid-tier mining company overnight. Expansion plans have been in place since the 1990's, as you can see from line cutting on the ground and in the changes made to Schedule 2 of the MMER.

There are innumerable ridges with a lake between them in this area, ideal for building a large tailings deposition area very cheaply. And Mallard Lake had already been used for tailings deposition over a very long period.

There's going to be a very public, acrimonious and extended legal battle if short sellers are ripped off. Indeed, watching this company is like reading a story about a secretive diamond heist.

How do short sellers manage, and how do they view mining? Firstly, they look down their noses at mining as if people involved were a bunch of rubes, easy to swindle.

"“I think we will finish them off before long, most likely from dealing directly with the [British Columbia Securities Commission] and auditor,” he wrote in an email.

Of course, the BCSC didn’t see it that way. Instead of targeting Silvercorp, the regulator accused Carnes himself of making false claims about the company and his own identity. Final submissions in the case were made in January, and a ruling is expected by the end of the month. None of the accusations have been proven, but it is one of the regulator’s most anticipated decisions in years."

Perhaps I should have been a short seller, because the regulator's office is a nepotistic organization where Down's syndrome runs in the family. But I should keep it all to myself, since after talking about my investment in this company, people won't even say hello and avoid my gaze as if I'm carrying crazy bugs. I have also accumulated more shares than I could have hoped for, and see that other people are doing the same.

Somebody wants to offer you half a cent for the three-dollar bill you happen to have in your pocket.

GBN.V is in the same legal 'province' as the Silvercorp. story. I somehow hope that Carson Block of Muddy Waters catches wind of this story, and buys shares releasing a damnable report on the equity swaps which can be shorted.

http://business.financialpost.com/news/mining/short-seller-activities-come-to-light-in-b-c-regulators-probe-of-silvercorp-metals-inc-affair

$CDW Weekly

Hooray! The bear market in the loonie is over! Oh, wait.

http://scharts.co/1HyeOfx

- F6