silvercorp is a junior silver producer that has experienced rapid growth. its stock price is up more than ten-fold in the past few years, but the company feels it is still highly undervalued in today's economic environment. part of that may be political risk built into the share price because all of its operations are in mainland china.

the company's response has been to embark on a share buyback program in which svm will purchase up to 3 million shares in the open market, approximately 2% of the total outstanding. i think we will see more of this from other companies going forward. if the market is underpricing all mining shares except the large producers, this is an appropriate response.

sso is not ready to do this yet, but as it stands now its market cap is down to about $2 billion. in a few years, if its first three mines are commissioned on schedule, it will be producing 25+ million oz. of silver-equivalent with cash flow of perhaps $500 million. if today's fire-sale stock price is still around, i can't think of a better way for sso to invest some of that cash flow.

http://biz.yahoo.com/iw/080320/03777...