February 8, 2011 / 10:28 PM / in 7 years

UPDATE 2-Silvercorp Q3 shines, FY11 output may beat target

* Q3 adj EPS $0.13 vs est $0.09

* Revenue up 65.5 pct (Recasts; adds production outlook)

Feb 8 (Reuters) - Canada’s Silvercorp Metals Inc (SVM.TO) posted a better-than-expected quarterly profit, helped by a surge in metal prices, and said it could better its silver production forecast for the current fiscal.

Silvercorp, which has a market capitalization of about $2 billion, expects to meet or exceed its silver production target of 5.3 million ounces for fiscal 2011 ending March 31.

The company, which has three projects in China, forecast fiscal 2012 silver production from four mines at the Ying Mining Camp at about 5.6 million ounces.

The capital expenditure for the three China projects is estimated at $67 million for fiscal 2012, it said.

Silver prices XAG= have soared as the global financial crisis boosted interest in precious metals as a haven from risk, rising 83 percent last year to its highest since 1980, and tripled between September 2008 and January’s high.

The poor man’s gold is likely to see prices exceed $30 an ounce in 2011, according to precious metals research and consulting firm GFMS. It traded at $30.30 an ounce on Tuesday.

Q3 PROFIT DOUBLES

It posted October-December profit of $29.7 million, or 18 cents a share, compared with $12.4 million, or 8 cents a share, last year. Adjusted profit was 13 cents a share.

Analysts on an average were expecting the company to earn 9 cents a share, according to Thomson Reuters I/B/E/S.

Revenue rose 65.5 percent to $51.8 million.

The company’s silver sales rose 25 percent to 1.52 million ounces at an average realized price of $20.36 an ounce -- up 57 percent.

In December, Silvercorp Metals said it got a 30-year mining permit for its silver-lead-zinc project in China’s Guangdong province. [ID:nSGE6BF07G]

The Vancouver-based company shares, which have more than doubled in value in the last one year, closed at C$11.70 on Tuesday on the Toronto Stock Exchange. (Reporting by Aftab Ahmed in Bangalore; Editing by Roshni Menon) (aftab.ahmed@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: aftab.ahmed.reuters.com@reuters.net))

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