6-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934

August 13, 2010

Commission File No. 0001340677

SILVERCORP METALS INC.
(Translation of registrant's name into English)

Suite 1378 - 200 Granville Street
Vancouver, BC Canada V6C 1S4
(Address of principal executive office)

[Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F]

Form 20-F [   ] Form 40-F [ X ]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1) [   ]

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is "submitting" the Form 6-K in paper as permitted by Regulation S-T "Rule" 101(b)(7) [   ]

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes [   ] No [X]

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: August 13, 2010	SILVERCORP METALS INC.
		“Lorne Waldman”
		Lorne Waldman
		Corporate Secretary

EXHIBIT INDEX

EXHIBIT	DESCRIPTION OF EXHIBIT
99.1	News Release dated August 12‚ 2010 – Silvercorp Reports Record Silver Production for Q1 of Fiscal 2011; Sales up 63%, Net Income up 88%, Cash Flow of $23.2 Million, up 123%
99.2	News Release dated August 13‚ 2010 – Silvercorp Announces Declaration of Quarterly Dividends – CAD$0.02
99.3	Unaudited Consolidated Financial Statements for Fiscal Quarter Ended June 30‚ 2010
99.4	Management’s Discussion and Analysis for Fiscal Quarter Ended June 30‚ 2010
99.5	CEO/CFO Certification of interim filings

EX-99.1

Exhibit 99.1

	Suite 1378 – 200 Granville Street
	Vancouver, BC, Canada V6C 1S4
	Tel: 604-669-9397
	Fax: 604-669-9387
	Toll Free Tel: 1-888-224-1881
	Email: info@silvercorp.ca
	Website: www.silvercorp.ca

PRESS RELEASE

Trading Symbol:	NYSE: SVM	August 12, 2010
	TSX: SVM

SILVERCORP REPORTS RECORD SILVER PRODUCTION FOR Q1 OF FISCAL 2011: SALES UP 63%, NET INCOME UP 88%, CASH FLOW OF $23.2 MILLION, UP 123%

VANCOUVER, British Columbia – August 12, 2010 – Silvercorp Metals Inc. (“Silvercorp” or the “Company”) reported today its unaudited financial and operating results for the first quarter ended June 30, 2010 (“Q1 2011”). The following financial results are expressed in US dollars (US$) unless stated otherwise.

FIRST QUARTER HIGHLIGHTS

• Silver production increased 18% to a record 1.4 million ounces, compared to the first quarter of fiscal year 2010 (“Q1 2010”);

• Net earnings increased 88% to $14.1 million, or $0.09 per share;

• Sales increased 63% to a record $36.7 million, driven by increased quantities of silver, lead and zinc sold combined with higher realized selling prices;

• Cash flow from operations increased 123% to $23.2 million, or $0.14 per share;

• Total production cost of negative $5.21 per ounce of silver and cash cost of negative $6.31 per ounce of silver positions Silvercorp as an industry leading low cost silver producer;

• Received the Environmental Permit for the GC Project from the Department of Environmental Protection of Guangdong Province, a key requirement for the mining permit application to the Ministry of Land and Resources of China;

• Dividend payment of $3.2 million, or CAD$0.02 per share;

• Total cash, cash equivalents and short term investments increased to $106.1 million.

FINANCIALS

For the first quarter of fiscal 2011, Silvercorp recorded net earnings of $14.1 million, or $0.09 per share, an increase of 88% over the earnings of $7.5 million, or $0.05 per share, in the same quarter last year. Net earnings improved primarily due to higher metal production and higher realized selling prices.

Sales in the first quarter were a record $36.7 million, an increase of 63% from $22.6 million in the same quarter last year. The increase was driven by higher quantities of metals sold and higher realized selling prices. In Q1 2011, the Company sold a record 1.4 million ounces of silver plus 18.8 million pounds of lead, and 4.4 million pounds of zinc, representing an increase of 18%, 17%, and 19%, respectively, compared to 1.2 million ounces of silver, 16.0 million pounds of lead, and 3.7 million pounds of zinc in Q1 2010. The average realized selling prices for silver, lead, and zinc increased to $13.92/oz., $0.74/lb., and $0.59/lb., respectively, increasing 41%, 32%, and 28%, respectively, compared with the metal prices realized in Q1 2010.

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Cost of sales for the quarter were $10.2 million, representing a 73% increase as the Company mined 40% more and milled 66% more ores compared to the same quarter last year.

Gross profit margin for the quarter was 72%, slightly lower than the margin of 74% in the same quarter last year. Partially offset by higher realized selling prices, the decrease of gross margin was mainly due to overall head grade decreasing to 326.3g/t from 455.8g/t in the same quarter last year, as production of ores from HPG, LM and TLP mines, which have lower grades compared to the Ying Mine, increased.

Cash flow from operations for the first quarter was $23.2 million, or $0.14 per share, a 123% increase from $10.4 million in the same quarter last year. The Company ended the quarter with $106.1 million in cash and short term investments, up from $94.7 million as at March 31, 2010.

OPERATIONS

Silvercorp mined 144,982 tonnes of ores in the first quarter, a 40% increase over 103,923 tonnes in the same period last year as production from the TLP, HPG, and LM mines grew as mine development progressed.

A total of 149,189 tonnes of ores were milled in the quarter, representing a 66% increase compared to 89,740 tonnes of ore milled in the same quarter last year. The new mill with 1,500 tpd capacity has been in full production during the quarter, while the old mill was partially in scheduled maintenance.

Consolidated total production cost per ounce of silver was negative $5.21 and the cash cost per ounce of silver was negative $6.31, representing a 21% and 24% improvement respectively, compared to the total production cost and cash production cost per ounce of silver of negative $4.29 and negative $5.09 respectively in same quarter last year. The improvement was mainly attributable to the increased by-product credits resulting from higher realized lead and zinc prices.

For the first quarter of fiscal year 2011, 83% of the Company’s silver production was from the Ying Mine, (97% in Q1 2010) and the operational results for the past five quarters at the Ying Mine are summarized as follows:

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	Q1 2011 30-Jun-10		Q4 2010 31-Mar-10		Q3 2010 31-Dec-09		Q2 2010 30-Sep-09		Q1 2010 30-Jun-09
Ores Mined (tonne)
Direct Smelting Ores (tonne)	3,339		2,418		3,357		3,550		3,773
Ores to be milled (tonne)	79,873		54,174		82,711		79,713		82,475
	83,212		56,592		86,068		83,263		86,248
Run of Mine Ores (tonne)
Direct Smelting Ores (tonne)	3,339		2,418		3,357		3,550		3,773
Ores Milled (tonne)	81,898		70,214		70,776		80,657		77,330
	85,237		72,632		74,133		84,207		81,103
Mining costs per tonne of ore mined ($)	55.10		57.50		56.90		54.71		52.70
Cash Mining Cost per tonne of ore mined ($)	43.83		45.60		45.75		46.16		42.27
Non Cash Mining Cost per tonne of ore mined ($)	11.27		11.84		11.15		8.55		10.43
Unit Shipping Costs ($)	3.71		3.72		3.60		3.45		3.55
Milling Costs per tonne of ore milled ($)	13.66		11.63		11.48		10.16		11.74
Cash Milling Cost per tonne of ore milled ($)	12.03		10.23		10.45		9.19		10.84
Non Cash Milling cost per tonne of ore milled ($)	1.62		1.39		1.02		0.96		0.90
Average Production Cost
Silver ($ per ounce)	3.05		3.37		2.58		2.53		2.52
Gold ($ per ounce)	163.66		172.29		83.44		110.57		114.46
Lead ($ per pound)	0.16		0.20		0.15		0.16		0.14
Zinc ($ per pound)	0.13		0.17		0.13		0.12		0.12
Total Production Cost per ounce of Silver ($)	(5.83	)	(6.14	)	(7.47	)	(5.51	)	(4.19	)
Total Cash Cost per ounce of Silver ($)	(6.80	)	(7.26	)	(8.36	)	(6.24	)	(5.00	)
Total Recovery of the Run of Mine Ores
Silver (%)	91.7		91.8		91.0		92.8		93.3
Lead (%)	96.4		96.3		95.8		96.6		96.5
Zinc (%)	69.2		67.5		76.0		71.2		76.3
Head Grade of Run of Mine Ores
Silver (gram/tonne)	470.5		429.3		488.5		452.5		488.1
Lead (%)	8.1		7.6		9.0		8.1		9.1
Zinc (%)	2.8		2.8		3.4		3.0		3.1
Metal Sales
Silver (in thousands of ounce)	1,147		836		1,086		1,107		1,134
Gold (in thousands of ounce)	0.5		0.3		0.2		0.1		0.1
Lead (in thousands of pound)	14,230		11,097		14,327		14,084		15,017
Zinc (in thousands of pound)	3,605		2,747		4,038		3,707		3,579
Metals Sales
Silver (‘000$)	15,956		11,024		14,094		12,178		11,228
Gold (‘000$)	373		186		84		48		58
Lead (‘000$)	10,583		8,645		10,917		9,546		8,489
Zinc (‘000$)	2,098		1,850		2,618		1,974		1,652
	29,010		21,705		27,713		23,746		21,427
Average Selling Price, Net of Value Added Tax and Smelter Charges
Silver ($ per ounce)	13.91		13.19		12.98		11.00		9.90
Gold ($ per ounce)	745.52		673.91		420.00		480.00		450.03
Lead ($ per pound)	0.74		0.78		0.76		0.68		0.57
Zinc ($ per pound)	0.58		0.67		0.65		0.53		0.46

OUTLOOK FOR FISCAL YEAR 2011

Ying Mining District, Henan Province, China

As of date of this news release, the recovery work from the July 24, 2010 flood is substantially completed. Mining operations at the Ying Mine resumed on August 2, 2010. Operations at the TLP and LM mines also resumed a couple days ago, while HPG mine will resume in one week. Still, due to the temporary production suspension caused by this flood, Silvercorp revised its Q2 2011 production estimates to 1.2 million ounces, 10% lower than previous forecast. The Company, however, maintains its previous outlook for the overall fiscal year 2011. The production plan for 2011 remains approximately 500,000 tonnes of ore at grades of 360 g/t silver, 8% lead and 1.2% zinc, yielding 5.3 million ounces of silver, 83.7 million pounds of lead and 10.3 million pounds of zinc.

Using the average metal prices in Q1 2011 and the above projected production figures, the Company’s mining operations in fiscal 2011 are expected to generate revenues of over $140 million. Capital expenditures for fiscal 2011 are budged at $13 million at the Ying Mining District -- including $7 million for the Ying mine, $4 million for the TLP mine and $2 million for the HPG and LM mines.

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GC Project, Guangdong Province, China

At the GC Project in Guangdong Province, China, Silvercorp submitted a mining permit application to MOLAR, which has accepted the application along with all supporting documents. The Company expects to receive the mining permit in October, 2010. Once the GC mining permit is granted, the Company plans to commence the construction phase for a 1,500 tpd mine and mill operation.

Silvertip Project, British Columbia, Canada

Within the next 12 months, the Company intends to complete the studies required for the submission of a B.C. Small Mine Permit application for a mining operation with an annual capacity of up to 75,000 tonnes. The Small Mine Permit will allow Silvercorp to commence early production, focusing on higher grade (>1,000 g/t silver equivalent) ore zones that can be accessed from existing tunnels. Expected cash flows from the small mining operation will then help finance further exploration to expand both the resource and future mine operations. This is similar to the method used to develop the Ying silver camp.

The Company’s first step will be to obtain the necessary permits to de-water the existing underground workings, which is expected to take approximately six months. Once the necessary permits are obtained, and the dewatering occurs, an underground exploration program, including bulk sampling, exploration drilling and a geotechnical assessment will be carried out.

A surface drill program will be carried out this summer where previous drill holes have intercepted extensive mineralized zones that were not included in the 2010 resource estimation as the drill holes were too widely spaced. Furthermore, several geophysical and geochemical anomalies located within 5 kilometers of the existing resource areas along the same shale-limestone contact zone previously identified as hosting high-grade mineralization will also be drill tested. The total capital expenditure budget for calendar year 2010 at the Silvertip project will be approximately $4-5 million.

Future Acquisitions

Silvercorp continues to pursue future growth opportunities by carrying out aggressive exploration programs within existing exploration and mining permit areas at its projects in addition to continually seeking out acquisitions projects in China and other jurisdictions.

CONFERENCE CALL AND WEBCAST INFORMATION

A conference call and live audio webcast to discuss these results is scheduled as follows:

Date:	Friday, August 13, 2010
Time:	8:00 am PT (11:00 am ET)
Dial-In Number:	1-612-234-9959
Live audio webcast:	www.silvercorp.ca (click on the link on the home page)
Playback webcast can be accessed at: www.silvercorp.ca

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FILING OF FINAL BASE SHELF PROSPECTUS

Further to its news release of July 30, 2010, Silvercorp has filed a final short form base shelf prospectus with the securities commissions in each of the provinces of Canada, except Quebec, and a corresponding amendment to its registration statement with the United States Securities and Exchange Commission. These filings will allow the Company to make offerings of debt securities (“Debt Securities”), common shares (“Common Shares”), warrants to purchase Common Shares and warrants to purchase Debt Securities (the “Warrants”), or subscription receipts which entitle the holder to receive upon satisfaction of certain release conditions, and for no additional consideration, Common Shares, Warrants or Debt Securities of the Company or any combination thereof (“Subscription Receipts”), (all of the foregoing, collectively, the “Securities”) or any combination thereof up to an aggregate initial offering price of US$120,000,000 during th e 25-month period that the final short form base shelf prospectus, including any amendments thereto, remains effective. Securities may be offered separately or together, in amounts, at prices and on terms to be determined based on market conditions at the time of sale and set forth in an accompanying shelf prospectus supplement and, subject to applicable regulations, may include ‘at-the-market’ transactions, private placements, public offerings or strategic investments.

Unless otherwise specified in a prospectus supplement, the net proceeds from the sale of the Securities will be used for general corporate purposes, including funding potential future acquisitions and capital expenditures. Each prospectus supplement will contain specific information concerning the use of proceeds from that sale of Securities.

A registration statement relating to these Securities has also been filed with the United States Securities and Exchange Commission but has not yet become effective. These Securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This news release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these Securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.

A copy of the final short form base shelf prospectus may be obtained from the Company’s Corporate Secretary by emailing investor@silvercorp.ca or directing a request to Silvercorp at Suite 1376 - 200 Granville Street, Vancouver, British Columbia, Canada, V6C 1S4, Telephone 1-888-224-1881, Attn: Corporate Secretary, or can be found on SEDAR at www.sedar.com and EDGAR at www.sec.gov.

About Silvercorp Metals Inc.

Silvercorp Metals Inc. is engaged in the acquisition, exploration, development and mining of high-grade silver-related mineral properties in China and Canada. Silvercorp is the largest primary silver producer in China through the operation and development of four silver-lead-zinc mines at the highly profitable Ying Mining Camp in the Henan Province of China. The company is also applying for a mining permit at the GC property in the Guangdong Province to establish a second base for production in China. Additionally, Silvercorp recently acquired the Silvertip project in northern British Columbia, Canada, as an additional platform for growth and geographic diversification. The Company’s shares are traded on the New York Stock Exchange and Toronto Stock Exchange and are included as a component of the S&P/TSX Composite and the S&P/TSX Global Mining Indexes.

For further information: SILVERCORP METALS INC., Rui Feng, Chairman & CEO and Lorne Waldman, Corporate Secretary, Phone: (604) 669-9397, Fax: (604) 669-9387, Toll Free 1(888) 224-1881, Email: info@silvercorp.ca, Website: www.silvercorp.ca.

CAUTIONARY DISCLAIMER -- FORWARD LOOKING STATEMENTS

Certain of the statements and information in this press release constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and “forward-looking information” within the meaning of applicable Canadian provincial securities laws. Any statements or information that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects”, “is expected”, “anticipates”, “believes”, “plans”, “projects”, “estimates”, “assumes”, “intends”, “strategies”, “targets”, “goals”, “forecasts”, “objectives”, “budgets”, “schedules”, “potential” or variations thereof or stating that certain acti ons, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements or information. Forward-looking statements or information relate to, among other things: the price of silver and other metals; the accuracy of mineral resource and mineral reserve estimates at the Company’s material properties; the sufficiency of the Company’s capital to finance the Company’s operations; estimates of the Company’s revenues and capital expenditures; estimated production from the Company’s mines in the Ying Mining District; timing of receipt of permits and regulatory approvals; availability of funds from production to finance the Company’s operations; and access to and availability of funding for future construction, use of proceeds form any financing and development of the Company& #146;s properties.

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Forward-looking statements or information are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those reflected in the forward-looking statements or information, including, without limitation, risks relating to: fluctuating commodity prices; calculation of resources, reserves and mineralization and precious and base metal recovery; interpretations and assumptions of mineral resource and mineral reserve estimates; exploration and development programs; feasibility and engineering reports; permits and licences; title to properties; First Nations title claims and rights; property interests; joint venture partners; acquisition of commercially mineable mineral rights; financing; recent market events and conditions; economic factors affecting the Company; timing, estimated amount, capital and operating expenditures and economic returns of future production; integration of future acquisitions into t he Company’s existing operations; competition; operations and political conditions; regulatory environment in China and Canada; environmental risks; foreign exchange rate fluctuations; insurance; risks and hazards of mining operations; key personnel; conflicts of interest; dependence on management; internal control over financial reporting as per the requirements of the Sarbanes-Oxley Act; and bringing actions and enforcing judgments under U.S. securities laws.

This list is not exhaustive of the factors that may affect any of the Company’s forward-looking statements or information. Forward-looking statements or information are statements about the future and are inherently uncertain, and actual achievements of the Company or other future events or conditions may differ materially from those reflected in the forward-looking statements or information due to a variety of risks, uncertainties and other factors, including, without limitation, those referred to in the Company’s Annual Information Form for the year ended March 31, 2010 under the heading “Risk Factors”. Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated, described or intended. Accordingly, readers should not place undue reliance on forward-looking statements or information.

The Company’s forward-looking statements and information are based on the assumptions, beliefs, expectations and opinions of management as of the date of this press release, and other than as required by applicable securities laws, the Company does not assume any obligation to update forward-looking statements and information if circumstances or management’s assumptions, beliefs, expectations or opinions should change, or changes in any other events affecting such statements or information. For the reasons set forth above, investors should not place undue reliance on forward-looking statements and information.

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SILVERCORP METALS INC. 

Consolidated Balance Sheets - Unaudited 

(Expressed in thousands of U.S. dollars) 

		June 30, 2010		March 31, 2010
ASSETS
Current Assets
Cash and cash equivalents	$	47,496	$	50,618
Short term investments		58,590		44,041
Amounts receivable, prepaids and deposits		2,404		2,474
Inventories		2,714		3,175
Current portion of future income tax assets		96		112
Amounts due from related parties		149		138
		111,449		100,558
Long term prepaids and deposits		830		505
Long term investments		14,224		14,838
Restricted cash		75		78
Plant and equipment		29,295		29,024
Mineral rights and properties		135,075		133,248
Future income tax assets		690		1,203
	$	291,638	$	279,454
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities	$	11,478	$	7,504
Deposits received		3,370		6,737
Bank loan and notes payable		-		1,465
Current portion of asset retirement obligations		298		292
Dividends payable		3,109		3,238
Income tax payable		2,030		1,658
		20,285		20,894
Future income tax liabilities		19,602		19,475
Asset retirement obligations		2,408		2,357
		42,295		42,726
Non-controlling interest		26,460		21,738
SHAREHOLDERS' EQUITY
Share capital		148,805		145,722
Contributed surplus		4,559		4,702
Reserves		31,893		31,893
Accumulated other comprehensive income		8,871		14,910
Retained earnings		28,755		17,763
		222,883		214,990
	$	291,638	$	279,454

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SILVERCORP METALS INC. 

Consolidated Statements of Operations - Unaudited 

(Expressed in thousands of U.S. dollars, except for per share figures) 

		Three months ended June 30,
		2010			2009
Sales	$	36,729		$	22,571
Cost of sales		8,664			4,972
Amortization and depletion		1,527			929
		10,191			5,901
Gross profit		26,538			16,670
Expenses
Accretion of asset retirement obligations		40			30
Amortization		144			202
Foreign exchange gain		(544	)		(1,516	)
General exploration and property investigation expenses		1,325			2,307
Impairment charges and bad debt		-			777
Investor relations		85			71
General and administrative		4,224			2,725
Professional fees		237			575
		5,511			5,171
		21,027			11,499
Other income and expenses
Equity loss on investment in NUX		(38	)		(82	)
Gain on disposal of mineral rights and properties		537			-
Loss on disposal of plant and equipment		-			(256	)
Interest expenses		(20	)		(7	)
Loss on held-for-trading securities		(49	)		-
Interest income		265			245
Other income		112			160
		807			60
Income before income taxes and non-controlling interest		21,834			11,559
Income tax expense (recovery)
Current		2,717			1,578
Future		535			(186	)
		3,252			1,392
Income before non-controlling interest		18,582			10,167
Non-controlling interest		(4,481	)		(2,680	)
Net income	$	14,101		$	7,487
Basic earnings per share	$	0.09		$	0.05
Diluted earnings per share	$	0.09		$	0.05
Weighted Average Number of Shares Outstanding - Basic		164,673,791			161,587,001
Weighted Average Number of Shares Outstanding - Diluted		165,563,545			162,915,490

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SILVERCORP METALS INC. 

Consolidated Statements of Cash Flows - Unaudited 

(Expressed in thousands of U.S. dollars) 

		Three months ended June 30,
		2010			2009
Cash provided by (used in)
Operating activities
Net income for the period	$	14,101		$	7,487
Add (deduct) items not affecting cash :
Accretion of asset retirement obligations		40			30
Amortization and depletion		1,671			1,131
Equity investment loss		38			82
Future income tax expenses (recovery)		535			(186	)
Impairment charges and bad debt		-			777
Loss on held-for-trading securities		49			-
Gain on disposal of mineral properties		(537	)		-
Loss on disposal of plant and equipment		-			256
Non-controlling interest		4,481			2,680
Stock-based compensation		780			391
Unrealized foreign exchange loss (gain)		327			(1,516	)
Changes in non-cash operating working capital		1,697			(747	)
Cash provided by operating activities		23,182			10,385
Investing activities
Mineral rights and properties
Acquisition and capital expenditures		(5,655	)		(2,173	)
Proceeds on disposals		537			-
Plant and equipment
Acquisition		(783	)		(389	)
Net redemption (purchase) of short term investments		(15,375	)		4,053
Prepayments to acquire plant and equipment		(812	)		(420	)
Cash provided by (used in) investing activities		(22,088	)		1,071
Financing activities
Advance to related parties, net of repayments received		(13	)		(21	)
Bank loan and notes payable
Proceeds		-			2,928
Repayments		(1,473	)		(658	)
Cash dividends distributed		(3,200	)		(2,770	)
Capital stock
Proceeds from issuance of common shares		1,188			-
Cash used in financing activities		(3,498	)		(521	)
Effect of exchange rate changes on cash and cash equivalents		(718	)		1,339
Increase (decrease) in cash and cash equivalents		(3,122	)		12,274
Cash and cash equivalents, beginning of period		50,618			41,470
Cash and cash equivalents, end of period	$	47,496		$	53,744

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SILVERCORP METALS INC. 

Mining Data 

(Expressed in thousands of U.S. dollars, except for mining data figures) 

Q1 Fiscal 2011	Three months ended June 30, 2010
	YING		HPG & LM		TLP		Total
Production Data
Mine Data
Ore Mined (tonne)
Direct Smelting Ores (tonne)	3,339		77		10		3,426
Stockpiled Ores (tonne)	79,873		17,831		43,852		141,556
	83,212		17,908		43,862		144,982
Run of Mine Ore (tonne)
Direct Smelting Ores (tonne)	3,339		77		10		3,426
Ores Milled (tonne)	81,898		18,076		45,789		145,763
	85,237		18,153		45,799		149,189
Mining cost per tonne of ore mined ($)	55.10		55.23		33.59		48.61
Cash mining cost per tonne of ore mined ($)	43.83		49.64		29.88		40.33
Non cash mining cost per tonne of ore mined ($)	11.27		5.59		3.71		8.28
Unit shipping costs($)	3.71		3.44		2.86		3.41
Milling cost per tonne of ore milled ($)	13.66		12.84		13.88		13.62
Cash milling cost per tonne of ore milled ($)	12.03		11.49		11.96		11.94
Non cash milling cost per tonne of ore milled ($)	1.62		1.36		1.92		1.68
Average Production Cost
Silver ($ per ounce)	3.05		5.54		7.81		3.86
Gold ($ per ounce)	163.66		350.15		460.70		223.89
Lead ($ per pound)	0.16		0.29		0.33		0.21
Zinc ($ per pound)	0.13		0.26		0.33		0.16
Total production cost per ounce of Silver ($)	(5.83	)	(6.12	)	0.08		(5.21	)
Total cash cost per ounce of Silver ($)	(6.80	)	(7.56	)	(1.84	)	(6.31	)
Total Recovery of the Run of Mine Ores
Silver (%)	91.7		89.5		85.1		90.9
Lead (%)	96.4		93.7		89.8		95.2
Zinc ( %)	69.2		60.6		74.0		69.5
Head Grades of Run of Mine Ores
Silver (gram/tonne)	470.5		179.1		115.8		326.3
Lead (%)	8.1		4.8		2.7		6.1
Zinc (%)	2.8		0.7		0.9		2.0
Sales Data
Metal Sales
Silver (in thousands of ounce)	1,147		91		149		1,387
Gold (in thousands of ounce)	0.5		0.4		0.2		1.1
Lead (in thousands of pound)	14,230		1,784		2,789		18,803
Zinc (in thousands of pound)	3,605		209		617		4,431
Metal Sales
Silver ($)	15,956		1,272		2,080		19,308
Gold ($)	373		333		157		863
Lead ($)	10,583		1,298		2,078		13,959
Zinc ($)	2,098		138		363		2,599
	29,010		3,041		4,678		36,729
Average Selling Price, Net of Value Added Tax and Smelter Charges
Silver ($ per ounce)	13.91		13.91		14.00		13.92
Gold ($ per ounce)	745.52		878.63		825.63		806.95
Lead ($ per pound)	0.74		0.73		0.75		0.74
Zinc ($ per pound)	0.58		0.66		0.59		0.59

10

SILVERCORP METALS INC. 

Mining Data 

(Expressed in thousands of U.S. dollars, except for mining data figures) 

Q1 Fiscal 2010	Three months ended June 30, 2009
	YING		HPG & LM		TLP		Total
Production Data
Mine Data
Ore Mined (tonne)
Direct Smelting Ores (tonne)	3,773		107		5		3,885
Stockpiled Ores (tonne)	82,475		13,379		4,184		100,038
	86,248		13,486		4,189		103,923
Run of Mine Ore (tonne)
Direct Smelting Ores (tonne)	3,773		107		5		3,885
Ores Milled (tonne)	77,330		7,880		645		85,855
	81,103		7,987		650		89,740
Mining cost per tonne of ore mined ($)	52.70		51.89		61.50		52.95
Cash mining cost per tonne of ore mined ($)	42.27		47.82		57.72		43.61
Non cash mining cost per tonne of ore mined ($)	10.43		4.07		3.78		9.34
Unit shipping costs	3.55		3.29		2.72		3.49
Milling cost per tonne of ore milled ($)	11.74		12.66		15.11		12.01
Cash milling cost per tonne of ore milled ($)	10.84		11.67		14.01		11.09
Non cash milling cost per tonne of ore milled ($)	0.90		1.00		1.10		0.92
Average Production Cost
Silver ($ per ounce)	2.52		4.16		1.57		2.59
Gold ($ per ounce)	114.46		241.75		-		149.67
Lead ($ per pound)	0.14		0.23		0.10		0.15
Zinc ($ per pound)	0.12		0.20		-		0.12
Total production cost per ounce of Silver ($)	(4.19	)	(7.53	)	(4.86	)	(4.29	)
Total cash cost per ounce of Silver ($)	(5.00	)	(7.85	)	(5.24	)	(5.09	)
Total Recovery of the Run of Mine Ores
Silver (%)	93.3		88.4		89.9		89.0
Lead (%)	96.5		87.1		94.5		93.5
Zinc ( %)	76.3		75.4		-		71.0
Head Grades of Run of Mine Ores
Silver (gram/tonne)	488.1		225.7		78.7		455.8
Lead (%)	9.1		6.6		5.9		8.8
Zinc (%)	3.1		0.9		-		2.9
Sales Data
Metal Sales
Silver (in thousands of ounce)	1,134		34		7		1,175
Gold (in thousands of ounce)	0.1		0.2		-		0.3
Lead (in thousands of pound)	15,017		929		97		16,043
Zinc (in thousands of pound)	3,579		156		-		3,736
Metal Sales
Silver ($)	11,228		330		66		11,624
Gold ($)	58		113		-		171
Lead ($)	8,489		507		55		9,051
Zinc ($)	1,652		73		-		1,725
	21,427		1,023		121		22,571
Average Selling Price, Net of Value Added Tax and Smelter Charges
Silver ($ per ounce)	9.90		9.71		9.04		9.89
Gold ($ per ounce)	450.03		666.10		-		572.50
Lead ($ per pound)	0.57		0.55		0.57		0.56
Zinc ($ per pound)	0.46		0.47		-		0.46

11

EX-99.2

Exhibit 99.2

	Suite 1378 – 200 Granville Street
	Vancouver, BC, Canada V6C 1S4
	Tel: 604-669-9397
	Fax: 604-669-9387
	Toll Free Tel: 1-888-224-1881
	Email: info@silvercorp.ca
	Website: www.silvercorp.ca

PRESS RELEASE

Trading Symbol:	NYSE: SVM	August 13, 2010
	TSX: SVM

SILVERCORP ANNOUNCES Q1 DIVIDEND OF CAD$0.02

VANCOUVER, British Columbia – August 13, 2010 – Silvercorp Metals Inc. (“Silvercorp” or the “Company”) today announced that its Board of Directors has declared its first fiscal 2011 quarterly dividend of CAD$0.02 per share, to be paid on or before October 21, 2010 to shareholders of record at the close of business on September 30, 2010.

About Silvercorp Metals Inc.

Silvercorp Metals Inc. is engaged in the acquisition, exploration, development and mining of high-grade silver-related mineral properties in China and Canada. Silvercorp is the largest primary silver producer in China through the operation and development of four silver-lead-zinc mines at the highly profitable Ying Mining Camp in the Henan Province of China. The company is also applying for a mining permit at the GC property in the Guangdong Province to establish a second base for production in China. Additionally, Silvercorp recently acquired the Silvertip project in northern British Columbia, Canada, as an additional platform for growth and geographic diversification. The Company’s shares are traded on the New York Stock Exchange and Toronto Stock Exchange and are included as a component of the S&P/TSX Composite and the S&P/TSX Global Mining Indexes.

For further information: SILVERCORP METALS INC., Rui Feng, Chairman & CEO and Lorne Waldman, Corporate Secretary, Phone: (604) 669-9397, Fax: (604) 669-9387, Toll Free 1(888) 224-1881, Email: info@silvercorp.ca, Website: www.silvercorp.ca.

EX-99.3

Exhibit 99.3

SILVERCORP METALS INC.

CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2010
Unaudited Interim Consolidated Financial Statements

(Expressed in thousands of US dollars, unless otherwise stated)

Notice to Readers of the Unaudited Interim Consolidated Financial Statements
For the three months ended June 30, 2010

The unaudited interim consolidated financial statements of Silvercorp Metals Inc. (the “Company”) for the three months ended June 30, 2010 (“Financial Statements”) have been prepared by management. The Financial Statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended March 31, 2010 which are available at the SEDAR website at www.sedar.com. The Financial Statements are stated in terms of thousands of U.S. dollars, unless otherwise indicated, and are prepared in accordance with Canadian generally accepted accounting principles.

SILVERCORP METALS INC.

Unaudited Consolidated Balance Sheets

(Expressed in thousands of U.S. dollars)

	Notes		June 30, 2010		March 31, 2010
ASSETS
Current Assets
Cash and cash equivalents		$	47,496	$	50,618
Short term investments			58,590		44,041
Amounts receivable, prepaids and deposits			2,404		2,474
Inventories	3		2,714		3,175
Current portion of future income tax assets			96		112
Amounts due from related parties	11		149		138
			111,449		100,558
Long term prepaids and deposits			830		505
Long term investments	4		14,224		14,838
Restricted cash			75		78
Plant and equipment	5		29,295		29,024
Mineral rights and properties	6		135,075		133,248
Future income tax assets			690		1,203
		$	291,638	$	279,454
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities		$	11,478	$	7,504
Deposits received			3,370		6,737
Bank loan and notes payable	7		-		1,465
Current portion of asset retirement obligations	8		298		292
Dividends payable	10(c)		3,109		3,238
Income tax payable			2,030		1,658
			20,285		20,894
Future income tax liabilities			19,602		19,475
Asset retirement obligations	8		2,408		2,357
			42,295		42,726
Non-controlling interest	9		26,460		21,738
SHAREHOLDERS' EQUITY
Share capital	10		148,805		145,722
Contributed surplus			4,559		4,702
Reserves			31,893		31,893
Accumulated other comprehensive income			8,871		14,910
Retained earnings			28,755		17,763
			222,883		214,990
		$	291,638	$	279,454
Commitments	15

Approved on behalf of the Board:

(Signed) Robert Gayton
Director

(Signed) Rui Feng
Director

See accompanying notes to unaudited interim consolidated financial statements

1

SILVERCORP METALS INC.

Unaudited Consolidated Statements of Operations

(Expressed in thousands of U.S. dollars, except for share and per share figures)

			Three months ended June 30,
	Notes		2010			2009
Sales		$	36,729		$	22,571
Cost of sales			8,664			4,972
Amortization and depletion			1,527			929
			10,191			5,901
Gross profit			26,538			16,670
Expenses
Accretion of asset retirement obligations	8		40			30
Amortization			144			202
Foreign exchange gain			(544	)		(1,516	)
General exploration and property investigation expenses			1,325			2,307
Impairment charges and bad debt			-			777
Investor relations			85			71
General and administrative			4,224			2,725
Professional fees			237			575
			5,511			5,171
			21,027			11,499
Other income and expenses
Equity loss on investment in NUX	4(a)		(38	)		(82	)
Gain on disposal of mineral rights and properties	6		537			-
Loss on disposal of plant and equipment			-			(256	)
Interest expenses			(20	)		(7	)
Loss on held-for-trading securities			(49	)		-
Interest income			265			245
Other income			112			160
			807			60
Income before income taxes and non-controlling interest			21,834			11,559
Income tax expense (recovery)
Current			2,717			1,578
Future			535			(186	)
			3,252			1,392
Income before non-controlling interest			18,582			10,167
Non-controlling interest	9		(4,481	)		(2,680	)
Net income		$	14,101		$	7,487
Basic earnings per share		$	0.09		$	0.05
Diluted earnings per share		$	0.09		$	0.05
Weighted Average Number of Shares Outstanding - Basic			164,673,791			161,587,001
Weighted Average Number of Shares Outstanding - Diluted			165,563,545			162,915,490

See accompanying notes to unaudited interim consolidated financial statements

2

SILVERCORP METALS INC.

Unaudited Consolidated Statements of Comprehensive Income

(Expressed in thousands of U.S. dollars)

		Three months ended June 30,
		2010			2009
Net income for the period	$	14,101		$	7,487
Other comprehensive income (loss)
Unrealized loss on available for sale securities, net of taxes		(293	)		-
Reclassification adjustment for loss included in income, net of taxes		-			195
Foreign exchange impact		(5,746	)		7,767
Other comprehensive income (loss)		(6,039	)		7,962
Comprehensive income	$	8,062		$	15,449

See accompanying notes to unaudited interim consolidated financial statements

3

SILVERCORP METALS INC.

Unaudited Consolidated Statements of Cash Flows

(Expressed in thousands of U.S. dollars)

			Three months ended June 30,
	Notes		2010			2009
Cash provided by (used in)
Operating activities
Net income for the period		$	14,101		$	7,487
Add (deduct) items not affecting cash :
Accretion of asset retirement obligations			40			30
Amortization and depletion			1,671			1,131
Equity investment loss			38			82
Future income tax expenses (recovery)			535			(186	)
Impairment charges and bad debt			-			777
Loss on held-for-trading securities			49			-
Gain on disposal of mineral properties			(537	)		-
Loss on disposal of plant and equipment			-			256
Non-controlling interest			4,481			2,680
Stock-based compensation			780			391
Unrealized foreign exchange loss (gain)			327			(1,516	)
Changes in non-cash operating working capital	16		1,697			(747	)
Cash provided by operating activities			23,182			10,385
Investing activities
Mineral rights and properties
Acquisition and capital expenditures			(5,655	)		(2,173	)
Proceeds on disposals			537			-
Plant and equipment
Acquisition			(783	)		(389	)
Net redemption (purchase) of short term investments			(15,375	)		4,053
Prepayments to acquire plant and equipment			(812	)		(420	)
Cash provided by (used in) investing activities			(22,088	)		1,071
Financing activities
Advance to related parties, net of repayments received			(13	)		(21	)
Bank loan and notes payable
Proceeds			-			2,928
Repayments			(1,473	)		(658	)
Cash dividends distributed			(3,200	)		(2,770	)
Capital stock
Proceeds from issuance of common shares			1,188			-
Cash used in financing activities			(3,498	)		(521	)
Effect of exchange rate changes on cash and cash equivalents			(718	)		1,339
Increase (decrease) in cash and cash equivalents			(3,122	)		12,274
Cash and cash equivalents, beginning of period			50,618			41,470
Cash and cash equivalents, end of period		$	47,496		$	53,744
Supplementary cash flow information	16

See accompanying notes to unaudited interim consolidated financial statements

4

SILVERCORP METALS INC.

Unaudited Consolidated Statements of Equity

(Expressed in thousands of U.S. dollars, except numbers for share figures)

	Share capital
											Accumulated
											other			Retained
		Number of				Contributed					comprehensive			earnings
		shares		Amount		surplus			Reserves		income (loss)			(deficit)			Total equity
Balance, March 31, 2009		161,587,001	$	135,604	$	3,764		$	31,893	$	(10,167	)	$	(8,648	)	$	152,446
Stock-based compensation		-		-		391			-		-			-			391
Reclassification adjustment for losses included in income		-		-		-			-		195			-			195
Cash dividends declared and distributed		-		-		-			-		-			(2,770	)		(2,770	)
Net income for the period		-		-		-			-		-			7,487			7,487
Foreign exchange impact		-		-		-			-		7,767			-			7,767
Balance, June 30, 2009		161,587,001		135,604		4,155			31,893		(2,205	)		(3,931	)		165,516
Options exercised		1,643,416		2,286		(976	)		-		-			-			1,310
Shares issued for property		1,200,000		7,832		-			-		-			-			7,832
Stock-based compensation		-		-		1,523			-		-			-			1,523
Unrealized gain on available for sale securities		-		-		-			-		328			-			328
Cash dividends declared and distributed		-		-		-			-		-			(9,366	)		(9,366	)
Net income for the period		-		-		-			-		-			31,060			31,060
Foreign exchange impact		-		-		-			-		16,787			-			16,787
Balance, March 31, 2010		164,430,417		145,722		4,702			31,893		14,910			17,763			214,990
Options exercised		298,874		1,956		(768	)		-		-			-			1,188
Shares issued for 10% interest of Henan Huawei (note 9)		163,916		1,127		(155	)		-		-			-			972
Stock-based compensation		-		-		780			-		-			-			780
Unrealized loss on available for sale securities		-		-		-			-		(293	)		-			(293	)
Cash dividends declared and distributed		-		-		-			-		-			(3,109	)		(3,109	)
Net income for the period		-		-		-			-		-			14,101			14,101
Foreign exchange impact		-		-		-			-		(5,746	)		-			(5,746	)
Balance, June 30, 2010		164,893,207	$	148,805	$	4,559		$	31,893	$	8,871		$	28,755		$	222,883

See accompanying notes to unaudited interim consolidated financial statements

5

SILVERCORP METALS INC.

Notes to Unaudited Interim Consolidated Financial Statements

June 30, 2010

(Expressed in thousands of U.S. dollars)

1. NATURE OF OPERATIONS

Silvercorp Metals Inc., along with its subsidiary companies (collectively the “Company”), is engaged in the acquisition, exploration, development, and mining of precious and base metal mineral properties.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Presentation and Principles of Consolidation

The Company’s consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles (“GAAP”) for interim financial information and follow the same accounting policies and methods set out in Note 2 to the audited consolidated financial statements for the year ended March 31, 2010. Accordingly, they do not include all the information and footnotes required by Canadian GAAP for complete financial statements. The unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended March 31, 2010. In the opinion of management, all adjustments considered necessary for a fair presentation of the financial position, results of operations and cash flows have been included. Operating results for the three months ended June 30, 2010 are not necessarily indicative of the results that may be expected for the year ending March 31, 2011.

These unaudited consolidated financial statements include the accounts of Silvercorp Metals Inc. and its wholly owned subsidiaries: Silvercorp Metals China Inc., Fortune Mining Limited, Fortune Copper Limited, Fortress Mining Inc., Fortune Gold Mining Limited, Victor Resources Ltd., Victor Mining Ltd., Yangtze Mining Ltd., Yangtze Mining (H.K.) Ltd., 0875786 B.C. Ltd., 82% owned subsidiary, Qinghai Found Mining Company Ltd. (“Qinghai Found”), 80% owned subsidiary, Henan Huawei Mining Co. Ltd. (“Henan Huawei”, also see Note 6&9), 77.5% owned subsidiary, Henan Found Mining Co. Ltd. (“Henan Found”), and 95% owned subsidiaries, Anhui Yangtze Mining Co. Ltd. and Guangdong Found Mining Co. Ltd.

All significant inter-company transactions and accounts have been eliminated upon consolidation.

(b) New Canadian Accounting Pronouncements

(i) Convergence with IFRS

In February 2008, the Canadian Accounting Standards Board confirmed that publicly accountable enterprises will be required to adopt International Financial Reporting Standards (“IFRS”) for fiscal years beginning on or after January 1, 2011, with early adoptions permitted. Accordingly, the Company plans to adopt IFRS for fiscal years beginning April 1, 2011. The Company’s first IFRS financial statements will be its interim financial statements for the first quarter of 2012 with an opening balance sheet date of April 1, 2011, which will require restatement of comparative information presented.

Page 6

SILVERCORP METALS INC.

Notes to Unaudited Interim Consolidated Financial Statements

June 30, 2010

(Expressed in thousands of U.S. dollars)

The conversion to IFRS will impact the Company’s accounting policies, information technology and data systems, internal control over financial reporting, and disclosure controls and procedures. The transition may also impact business activities, such as certain contractual arrangements, debt covenants, capital requirements and compensation arrangements.

(ii) Business combinations and related sections

In January 2009, the CICA issued Section 1582 “Business Combinations” to replace Section 1581. The new standard effectively harmonizes the business combinations standard under Canadian GAAP with IFRS. The new standard revises guidance on the determination of the carrying amount of the assets acquired and liabilities assumed, goodwill and accounting for non-controlling interests at the time of a business combination.

The CICA concurrently issued Section 1601 “Consolidated Financial Statements” and Section 1602 “Non-controlling Interests”, which replace Section 1600 “Consolidated Financial Statements”. Section 1601 provides revised guidance on the preparation of consolidated financial statements and Section 1602 addresses accounting for non-controlling interests in consolidated financial statements subsequent to a business combination.

The new standards will become effective on January 1, 2011 with early adoption available. The Company did not adopt these new standards but continues to evaluate the attributes of early adoption of these standards and their potential effects.

(iii) Multiple deliverable revenue arrangements

In December 2009, the EIC issued EIC Abstract 175, “Multiple Deliverable Revenue Arrangements”. This EIC addresses how to determine whether an arrangement involving multiple deliverables contains more than one unit of accounting and how such a multiple deliverable revenue arrangement consideration should be measured and allocated to the separate units of accounting. This EIC should be applied prospectively and should be applied to revenue arrangements with multiple deliverables entered into or materially modified in the first annual fiscal period beginning on or after January 1, 2011. Early adoption is permitted. The Company did not early adopt this EIC and upon adoption does not expect it to have a material impact on the Company’s consolidated financial statements.

Page 7

SILVERCORP METALS INC.

Notes to Unaudited Interim Consolidated Financial Statements

June 30, 2010

(Expressed in thousands of U.S. dollars)

3. INVENTORIES

Inventories consisted of the following:

		June 30, 2010		March 31, 2010
Direct smelting ore and stockpile ore	$	326	$	585
Concentrate inventory		470		855
Total stockpile		796		1,440
Material and supplies		1,918		1,735
	$	2,714	$	3,175

The amounts of inventory recognized as expenses during the three months ended June 30, 2010 and 2009 were equivalent to the sum of cost of sales and amortization and depletion in the respective periods.

4. LONG TERM INVESTMENTS

			June 30, 2010		March 31, 2010
Equity investments with significant influence
New Pacific Metals Corp.	(a)	$	5,807	$	6,103
Equity investments: Available-for-sale
Luoyang Yongning Smelting Co. Ltd.			6,930		6,886
Marketable securities	(b)		1,487		1,849
		$	14,224	$	14,838

(a) New Pacific Metals Corp. (“NUX”)

New Pacific Metals Corp. is a Canadian public company listed on the TSX Venture Exchange with a trading symbol “NUX”. As at June 30, 2010, the Company owned 7,400,000 common shares (June 30, 2009 - 7,400,000 common shares) of NUX, representing an ownership interest of 23.2% (March 31, 2010 - 23.4%). NUX is a related party of the Company by way of common director and officers.

Page 8

SILVERCORP METALS INC.

Notes to Unaudited Interim Consolidated Financial Statements

June 30, 2010

(Expressed in thousands of U.S. dollars)

The Company accounts for its investment in NUX using the equity method, as the Company is able to exercise significant influence over NUX. The summary of the investment in NUX and its market value as at respective balance sheet dates are as follows:

						Value of NUX's
						common shares per
	Number of shares		Amount			quoted market price
Balance, March 31, 2009	7,400,000	$	5,285		$	5,285
Equity in loss of investee company			(424	)
Impact of foreign currency translation			1,242
Balance, March 31, 2010	7,400,000		6,103			5,028
Equity in loss of investee company			(38	)
Impact of foreign currency translation			(258	)
Balance, June 30, 2010	7,400,000	$	5,807		$	5,303

(b) Available-for-sale marketable securities

Available-for-sale marketable securities represented the Company’s equity investments in publicly traded companies with no significant influence. The following schedule summarizes these marketable securities:

As at and for the period ended June 30, 2010:

		Fair value		Cost		Accumulated changes in market value
Marketable securities	$	1,487	$	1,603	$	(116	)
As at and for the period ended March 31, 2010:
		Fair value		Cost		Accumulated changes in market value
Marketable securities	$	1,849	$	1,603	$	246

5. PLANT AND EQUIPMENT

Plant and equipment consist of:

				June 30, 2010							March 31, 2010
		Cost		Accumulated Depreciation, Disposition and Impairment Charges			Net BookValue		Cost		Accumulated Depreciation Disposition and Impairment Charges			Net Book Value
Building	$	20,178	$	(1,742	)	$	18,436	$	19,776	$	(1,510	)	$	18,266
Office equipment and furniture		1,372		(630	)		742		1,421		(652	)		769
Machinery		9,051		(1,787	)		7,264		8,759		(1,525	)		7,234
Motor vehicle		2,100		(942	)		1,158		1,979		(843	)		1,136
Land use right		956		(27	)		929		949		(22	)		927
Leasehold improvement		320		(123	)		197		335		(112	)		223
Construction in process		569		-			569		469		-			469
	$	34,546	$	(5,251	)	$	29,295	$	33,688	$	(4,664	)	$	29,024

Page 9

SILVERCORP METALS INC.

Notes to Unaudited Interim Consolidated Financial Statements

June 30, 2010

(Expressed in thousands of U.S. dollars)

6. MINERAL RIGHTS AND PROPERTIES

Mineral rights and properties consisted of the following:

		Ying			HPG			TLP			LM			GC & SMT			Silvertip			Total
Balance, March 31, 2009	$	23,457		$	-		$	-		$	-		$	65,956		$	-		$	89,413
Acquisition		-			-			-			-			-			15,217			15,217
Capitalized expenditures		6,687			1,195			4,466			1,200			1,093			-			14,641
Depletion		(2,508	)		(45	)		(33	)		(23	)		-			-			(2,609	)
Impact of foreign currency translation		32			-			-			-			16,000			554			16,586
Balance, March 31, 2010		27,668			1,150			4,433			1,177			83,049			15,771			133,248
Acquisition		-			400			-			566			-			-			966
Capitalized expenditures		3,012			332			1,298			526			64			527			5,759
Depletion		(836	)		(43	)		(43	)		(21	)		-			-			(943	)
Impact of foreign currency translation		193			12			37			14			(3,525	)		(686	)		(3,955	)
Balance, June 30, 2010	$	30,037		$	1,851		$	5,725		$	2,262		$	79,588		$	15,612		$	135,075

Although the Company has taken steps to verify title to the mineral properties in which it, through its subsidiaries, has an interest, in accordance with industry standards for the stage of exploration of such properties, those procedures do not guarantee the Company’s title. Property title may be subject to unregistered prior agreements and non-compliance with regulatory requirements.

HPG and LM properties are held through the Company’s subsidiary Henan Huawei. In May 2010, the Company acquired an additional 10% beneficial interest of Henan Huawei (also see note 9). The transaction increased the Company’s interest in HPG and LM properties from 70% to 80%.

During the year ended March 31, 2009, the Nabao project, originally acquired in June 2007, was written off as a result of unfavorable exploration results. During the year ended March 31, 2010, the Company entered into an agreement to dispose of the Nabao project, consisting of three exploration permits, for $732 (RMB¥5.0 million) to a third party. Cash payments of $586 (RMB¥4.0 million) was received as of June 30, 2010. In May 2010, two of the three exploration permits were transferred to the buyer. A total gain of $537 was recognized on the disposition of these two exploration permits. The transfer of the third exploration permit was still in progress at June 30, 2010.

7. BANK LOAN AND NOTES PAYABLE

On June 16, 2010, bank loan balance of $1,465 carried from March 31, 2010 plus accrued interest was fully repaid. As at June 30, 2010, the Company did not have any outstanding bank loan and notes payable balance.

Page 10

SILVERCORP METALS INC.

Notes to Unaudited Interim Consolidated Financial Statements

June 30, 2010

(Expressed in thousands of U.S. dollars)

8. ASSET RETIREMENT OBLIGATIONS

The following table presents the reconciliation of the beginning and ending obligations associated with the site restoration of the mineral properties:

		Current portion		Long term portion		Total
Balance, March 31, 2009	$	-	$	2,029	$	2,029
ARO revision		292		200		492
Accretion on ARO		-		125		125
Foreign exchange impact		-		3		3
Balance, March 31, 2010		292		2,357		2,649
Accretion on ARO		4		36		40
Foreign exchange impact		2		15		17
Balance, June 30, 2010	$	298	$	2,408	$	2,706

9. NON CONTROLLING INTERESTS

The continuity of non controlling interests is summarized as follows:

		Henan Found		Guangdong Found			Total
Balance, March 31, 2009	$	7,225	$	385		$	7,610
Operation sharing for the year		13,189		149			13,338
Foreign exchange impact		128		662			790
Balance, March 31, 2010		20,542		1,196			21,738
Operation sharing for the period		4,503		(22	)		4,481
Foreign exchange impact		281		(40	)		241
Balance, June 30, 2010	$	25,326	$	1,134		$	26,460

In May 2010, the Company acquired an additional10% beneficial interest in Henan Huawei from the non-controlling interest shareholder for consideration of $1,127 which was paid by the Company through the issuance of 163,916 of the Company’s common shares. The common share was valued at $6.876 per share, using the average closing price on the New York Stock Exchange for the two trading days before and two trading days after the control was obtained.

Page 11

SILVERCORP METALS INC.

Notes to Unaudited Interim Consolidated Financial Statements

June 30, 2010

(Expressed in thousands of U.S. dollars)

The increase of the Company’s ownership in Henan Huawei from 70% to 80% has been accounted for using the purchase method. The allocation of the purchase cost to the assets acquired and liabilities assumed is based upon estimated fair values at the time of acquisition. The actual fair value for the assets acquired and liabilities assumed will be determined in future periods. As a result, the purchase price allocation may be subject to change. The preliminary assessment of the fair value of the assets acquired and liabilities assumed as a result of the Company’s 10% increase in the ownership of Henan Huawei are as follows:

Purchase price comprised of:

163,916 shares issued at $6.876 per share	$	1,127
Net working capital	$	(151	)
Plant and equipment		144
Mineral rights and properties		1,229
Assets retirement obligations		(95	)
	$	1,127

As at June 30, 2010, non-controlling interests in Henan Found, Henan Huawei, Qinghai Found and Guangdong Found were 22.5%, 20%, 12% and 5%, respectively (March 31, 2010 – 22.5%, 30%, 12% and 5%, respectively).

10. SHARE CAPITAL

(a) Authorized

Unlimited number of common shares without par value.

Page 12

SILVERCORP METALS INC.

Notes to Unaudited Interim Consolidated Financial Statements

June 30, 2010

(Expressed in thousands of U.S. dollars)

(b) Stock Options

The Company has a stock option plan which allows for the maximum number of common shares to be reserved for issuance on the exercise of options granted under the stock option plan to be a rolling 10% of the issued and outstanding common shares from time to time. The maximum exercise period may not exceed 10 years from the date of the grant of the options to employees, officers, and consultants. The following is a summary of option transactions:

				Weighted average
	Number of			exercise price per
	shares			share CAD$
Balance, March 31, 2009	3,524,703		$	3.65
Options granted	1,546,500			3.95
Options exercised	(1,643,416	)		0.83
Options forfeited	(223,104	)		5.97
Balance, March 31, 2010	3,204,683			5.08
Options granted	262,000			7.40
Options exercised	(298,874	)		4.09
Options forfeited	(75,834	)		5.66
Balance, June 30, 2010	3,091,975		$	5.37

During the three months ended June 30, 2010, a total of 262,000 options with a life of five years were granted to directors, officers, and employees at an exercise price of CAD$7.40 per share subject to a vesting schedule over three-year term with 8.333% options vesting every three months.

The following is the summary of assumptions used to estimate the fair value of each option granted using the Black-Scholes option pricing model.

	Three months ended June 30,
	2010	2009
Risk free interest rate	2.18% to 3.20%	1.18% to 1.86%
Expected life of options in years	2 to 5 years	2 to 5 years
Expected volatility	72% to 85%	73% to 84%
Expected dividend yield	1%	3%

The weighted average grant date fair value of options granted during the three months ended June 30, 2010 was CAD$3.80 (three months ended June 30, 2009 - CAD$1.23). For the three months ended June 30, 2010, a total of $780 (three months ended June 30, 2009 - $391) in stock-based compensation expenses was recorded and included in the general and administrative expenses on the consolidated statements of operations.

Page 13

SILVERCORP METALS INC.

Notes to Unaudited Interim Consolidated Financial Statements

June 30, 2010

(Expressed in thousands of U.S. dollars)

The following table summarizes information about stock options outstanding as at June 30, 2010:

Exercise	Number of options	Weighted average	Weighted average	Number of options	Weighted average
price in	outstanding	remaining contractual	exercise price in	exercisable	exercise price in
CAD$	at June 30, 2010	life (YRS)	CAD$	at June 30, 2010	CAD$
$        5.99	10,000	0.01	$        5.99	10,000	$        5.99
4.32	118,899	1.06	4.32	118,899	4.32
6.74	614,400	1.78	6.74	563,075	6.74
6.95	90,000	2.26	6.95	82,500	6.95
9.05	101,700	2.55	9.05	76,275	9.05
7.54	50,000	2.87	7.54	33,333	7.54
5.99	387,994	3.00	5.99	208,828	5.99
3.05	128,000	3.26	3.05	58,000	3.05
2.65	915,982	3.80	2.65	241,981	2.65
7.00	413,000	4.52	7.00	34,417	7.00
7.40	262,000	4.80	7.40	7,500	7.40
2.65-9.05	3,091,975	3.24	5.37	1,434,808	5.75

(c) Cash Dividends Declared and Distributed

During the three months ended June 30, 2010, quarterly cash dividends of CAD$0.02 (three month ended June 30, 2009, $0.02) per share, totaling $3,109 (three months ended June 30, 2009, $2,770) was declared. The full amount was subsequently paid on July 21, 2010.

11. RELATED PARTY TRANSACTIONS

Related party transactions not disclosed elsewhere in the financial statements are as follows:

Amount due from related parties		June 30, 2010		March 31, 2010
New Pacific Metals Corp. (a)	$	149	$	136

		Three months ended June 30,
Transactions with related parties		2010		2009
New Pacific Metals Corp. (a)	$	59	$	35
Quanfa Exploration Consulting Services Ltd. (b)		-		88
McBrighton Consulting Ltd.(c)		55		44
R. Feng Consulting Ltd. (d)		82		82
	$	196	$	249

(a) New Pacific Metals Corp. is a publicly traded company with director and officers in common with the Company. Further to a services and administrative costs reallocation agreement between the Company and NUX, the Company will recover costs for services rendered to NUX and expenses incurred on behalf of NUX. During the three months ended June 30, 2010, the Company recovered $59 (three months ended June 30, 2009 - $35) from NUX for services rendered and expenses incurred on behalf of NUX. The costs recovered from NUX were recorded as a direct reduction of general and administrative expenses on the consolidated statements of operations.

Page 14

SILVERCORP METALS INC.

Notes to Unaudited Interim Consolidated Financial Statements

June 30, 2010

(Expressed in thousands of U.S. dollars)

(b)	Quanfa Exploration Consulting Services Ltd. (“Quanfa”) is a private company with majority shareholders and management from the senior management of Henan Found and Henan Huawei. During the three months ended June 30, 2010, the Company paid $nil (three months ended June 30, 2009 - $88) to Quanfa for its consulting services provided.
(c)	During the three months ended June 30, 2010, the Company paid $55 (three months ended June 30, 2009 - $44) to McBrighton Consulting Ltd., a private company controlled by a director of the Company for consulting services.
(d)	During the three months ended June 30, 2010, the Company paid $82 (three months ended June 30, 2009 - $82) to R. Feng Consulting Ltd., a private company controlled by a director of the Company for consulting services.

The transactions with related parties during the period were measured at the exchange amount, which was the amount of consideration established and agreed by the parties. The balances with related parties were unsecured, non-interest bearing, and due on demand.

12. CAPITAL DISCLOSURES

The Company’s capital management objectives are intended to safeguard Silvercorp’s ability to support the Company’s normal operating requirement on an ongoing basis, continues the development and exploration of its mineral properties, and supports any expansionary plans.

The capital of the Company consists of the items included in shareholders’ equity. Risk and capital management are primarily the responsibility of the Company’s corporate finance function and is monitored by the Board of Directors. The Company manages the capital structure and makes adjustments depending on economic conditions. Funds have been primarily secured through profitable operations and issuances of equity capital. The Company invests all capital that is surplus to its immediate needs in short-term, liquid and highly rated financial instruments, such as cash and other short-term deposits, all held with major financial institutions. Significant risks are monitored and actions are taken, when necessary, according to the Company’s approved policies.

13. FINANCIAL INSTRUMENTS

The Company manages its exposure to financial risks, including liquidity risk, foreign exchange rate risk, interest rate risk, credit risk and equity price risk in accordance with its risk management framework. The Company’s Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework and reviews the Company’s policies on an ongoing basis.

Page 15

SILVERCORP METALS INC.

Notes to Unaudited Interim Consolidated Financial Statements

June 30, 2010

(Expressed in thousands of U.S. dollars)

(a) Fair value

The following table sets forth the Company’s financial assets and liabilities that are measured at fair value on a recurring basis by level within the fair value hierarchy. As at June 30, 2010, those financial assets and liabilities are classified in their entirety based on the level of input that is significant to the fair value measurement.

		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	47,496	$	-	$	-	$	47,496
Short term investments: warrants		-		-		209		209
Short term investments: other than warrants		58,381		-		-		58,381
Receivables and deposits		-		1,313		-		1,313
Amounts due from related parties		-		149		-		149
Restricted cash		-		75		-		75
Available-for-sale marketable securities		1,487		-		-		1,487
Financial liabilities
Accounts payable and accrued liabilities	$	-	$	11,478	$	-	$	11,478
Deposits received		-		3,370		-		3,370
Dividends payable		-		3,109		-		3,109

(b) Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in raising funds to meet commitments associated with financial instruments. The Company manages liquidity by maintaining adequate cash and cash equivalents and short term investment.

In the normal course of business, the Company enters into contracts that give rise to commitments for future minimum payments. The following summarizes the remaining contractual maturities of the Company’s financial liabilities.

		June 30, 2010		March 31, 2010
		Within a year
Accounts payable and accrued liabilities	$	11,478	$	7,504
Deposits received		3,370		6,737
Dividends payable		3,109		3,238
Bank loan and notes payable		-		1,465
	$	17,957	$	18,944

(c) Foreign exchange risk

The Company undertakes transactions in various foreign currencies, and reports its results of its operations in US Dollars while the Canadian dollar is considered as its functional currency. The Company is therefore exposed to foreign exchange risk arising from transactions denominated in a foreign currency and the translation of functional currency to reporting currency.

Page 16

SILVERCORP METALS INC.

Notes to Unaudited Interim Consolidated Financial Statements

June 30, 2010

(Expressed in thousands of U.S. dollars)

The Company conducts its mining operations in China and thereby the majority of the Company’s assets, liabilities, revenues and expenses are denominated in RMB¥, which was tied to the US Dollar until July 2005, and is now tied to a basket of currencies of China’s largest trading partners. The RMB¥ is not a freely convertible currency.

The Company currently does not engage in foreign currency hedging, and the exposure of the Company’s financial assets and financial liabilities to foreign exchange risk is summarized as follows:

The amounts are expressed in US$ equivalents		June 30, 2010		March 31, 2010
Canadian dollars	$	28,899	$	27,125
United States dollars		12,646		29,808
Chinese renminbi		67,565		48,173
Hong Kong dollars		-		1
Total financial assets	$	109,110	$	105,107
Canadian dollars	$	4,622	$	3,799
United States dollars		-		5
Chinese renminbi		13,335		15,140
Total financial liabilities	$	17,957	$	18,944

As at June 30, 2010, with other variables unchanged, a 1% strengthening (weakening) of the Chinese RMB¥ against the Canadian dollar would have increased (decreased) net income (loss) by approximately $0.1 million and increased (decreased) other comprehensive income (loss) by $0.4 million.

As at June 30, 2010, with other variables unchanged, a 1% strengthening (weakening) of the Canadian dollar against the US dollar would have decreased (increased) net income by approximately $0.1 million and would have increased (decreased) other comprehensive income by approximately $0.9 million.

(d) Interest rate risk

Interest risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market interest rates. The Company’s cash equivalents and short term investments primarily includes highly liquid investments that earn interests at market rates that are fixed to maturity or at variable interest rates. Because of the short-term nature of these financial instruments, fluctuations in market rates do not have significant impact on the fair values of the financial instruments as of June 30, 2010.

Page 17

SILVERCORP METALS INC.

Notes to Unaudited Interim Consolidated Financial Statements

June 30, 2010

(Expressed in thousands of U.S. dollars)

(e) Credit risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company is exposed to credit risk primarily associated to accounts receivable, cash and cash equivalents and short-term investments. The carrying amount of assets included on the balance sheet represents the maximum credit exposure.

The Company undertakes credit evaluations on counterparties as necessary and has monitoring processes intended to mitigate credit risks. The Company has accounts receivables from customers primarily in China engaged in the mining and milling of base and polymetallic metals industry. The historical level of customer defaults is zero and aging of accounts receivable are less than 30 days, and, as a result, the credit risk associated with accounts receivable from customers at June 30, 2010 is considered to be immaterial.

(f) Equity price risk

The Company holds certain marketable securities that will fluctuate in value as a result of trading on Canadian financial markets. Furthermore, as the Company’s marketable securities are also in mining companies, market values will fluctuate as commodity prices change. Based upon the Company’s portfolio at June 30, 2010, a 10% increase (decrease) in the market price of the securities held, ignoring any foreign currency risk, would have resulted in an increase (decrease) to net income of approximately $0.1 million.

14. SEGMENTED INFORMATION

The Company operates in one operating segment, being the acquisition, exploration, development, and operation of mineral properties. Based on the internal reporting structure and the nature of the Company’s activities, significant projects within the same geographic area are identified for segment reporting purposes. Corporate Head Office provides support to the mining and exploration activities with respect to financial and technical supports and its information is included in the Canada category. Assets, incidental income and expenses in holding companies are presented in other regions. This structure reflects how the Company manages its business and how it classifies its operations for planning and measuring performances.

Page 18

SILVERCORP METALS INC.

Notes to Unaudited Interim Consolidated Financial Statements

June 30, 2010

(Expressed in thousands of U.S. dollars)

(a) Geographic information for certain long-term assets are as follows:

June 30, 2010
				China				Canada				Other
Balance sheet items:		Henan		Guangdong		Other		Silvertip		Head Office		regions		Total
Mineral rights and properties	$	39,875	$	79,588	$	-	$	15,612	$	-	$	-	$	135,075
Plant and equipment		27,000		84		1,773		-		438		-		29,295
Long term investments		6,930		-		-		-		5,949		1,345		14,224

March 31, 2010
				China				Canada				Other
Balance sheet items:		Henan		Guangdong		Other		Silvertip		Head Office		regions		Total
Mineral rights and properties	$	34,428	$	83,049	$	-	$	15,771	$	-	$	-	$	133,248
Plant and equipment		26,541		105		1,893		-		485		-		29,024
Long term investments		6,886		-		-		-		6,339		1,613		14,838

Page 19

SILVERCORP METALS INC.

Notes to Unaudited Interim Consolidated Financial Statements

June 30, 2010

(Expressed in thousands of U.S. dollars)

(b) Geographic information for operating results is as follows:

Three months period ended June 30, 2010
		China									Canada						Other
Balance sheet items:		Henan			Guangdong		Other				Silvertip			Head Office			regions			Total
Sales	$	36,729		$	-		$	-		$	-		$	-		$	-		$	36,729
Cost of sales		(8,664	)		-			-			-			-			-			(8,664	)
Amortization and depletion		(1,527	)		-			-			-			-			-			(1,527	)
Gross Profit		26,538			-			-			-			-			-			26,538
Expenses		(2,149	)		(93	)		(422	)		(51	)		(3,335	)		(5	)		(6,055	)
Foreign exchange gain (loss)		-			(369	)		(22	)		-			509			426			544
Interest & other income		224			21			5			-			98			29			377
Gain (loss) on asset disposals and other expenses		(20	)		-			537			-			(38	)		(49	)		430
Non controlling interest		(4,503	)		22			-			-			-			-			(4,481	)
Income tax expenses		(3,252	)		-			-			-			-			-			(3,252	)
Net income (loss)	$	16,838		$	(419	)	$	98		$	(51	)	$	(2,766	)	$	401		$	14,101

Three months period ended June 30, 2009
		China									Canada					Other
Balance sheet items:		Henan			Guangdong			Other			Silvertip		Head Office			regions			Total
Sales	$	22,571		$	-		$	-		$	-	$	-		$	-		$	22,571
Cost of sales		(4,972	)		-			-			-		-			-			(4,972	)
Amortization and depletion		(929	)		-			-			-		-			-			(929	)
Gross Profit		16,670			-			-			-		-			-			16,670
Expenses		(3,778	)		(53	)		(119	)		-		(1,960	)		-			(5,910	)
Foreign exchange gain (loss)		-			1,319			60			-		(69	)		206			1,516
Interest & other income		222			-			-			-		165			(14	)		373
Impairment charges		-			-			-			-		(195	)		(582	)		(777	)
Gain (loss) on asset disposals and other expenses		(256	)		-			-			-		(82	)		25			(313	)
Non controlling interest		(2,596	)		(84	)		-			-		-			-			(2,680	)
Income tax expenses		(1,392	)		-			-			-		-			-			(1,392	)
Net income (loss)	$	8,870		$	1,182		$	(59	)	$	-	$	(2,141	)	$	(365	)	$	7,487

Page 20

SILVERCORP METALS INC.

Notes to Unaudited Interim Consolidated Financial Statements

June 30, 2010

(Expressed in thousands of U.S. dollars)

(c) Sales by metals

The sales generated for the three months ended June 30, 2010 and 2009 comprised of:

		Three months period ended June 30,
		2010		2009
Silver (Ag)	$	19,308	$	11,624
Gold (Au)		863		171
Lead (Pb)		13,959		9,051
Zinc (Zn)		2,599		1,725
	$	36,729	$	22,571

(d) Major customers

During the three months ended June 30, 2010, four major customers (three months ended June 30, 2009 - three) accounted for 14% to 38% each (three months ended June 30, 2009 - 19% to 23%) and collectively 72% (three months ended June 30, 2009 - 62%) of the total sales of the Company.

15. COMMITMENTS

Commitments, not disclosed elsewhere in these financial statements, are as follows:

The Company entered into office rental agreements with total rental expense of $1,213 over the next four years as follows:

		2011		2012		2013		2014		Total
Rental expense	$	250	$	363	$	346	$	254	$	1,213

16. SUPPLEMENTARY CASH FLOW INFORMATION

		Three months ended June 30,
Net change in non-cash working capital		2010			2009
Accounts receivable, prepaids and deposits	$	121		$	139
Inventory		397			(950	)
Restricted cash		-			726
Accounts payable and accrued liabilities		4,210			387
Income tax payable		359			(2,335	)
Deposits received		(3,390	)		1,286
	$	1,697		$	(747	)
Supplemental information:
Interest paid	$	15		$	2
Income tax paid	$	2,358		$	3,977
Common shares issued for 10% interest of Henan Huawei	$	1,127		$	-

Page 21

EX-99.4

Exhibit 99.4

SILVERCORP METALS INC. 

Management’s Discussion and Analysis of Financial Condition and Results of Operations 

For the Three Months Ended June 30, 2010 

(Expressed in thousands of U.S. dollars unless otherwise stated) 

Management’s Discussion and Analysis (“MD&A”) is intended to help the reader understand the significant factors that have affected Silvercorp Metals Inc. and its subsidiaries’ (“Silvercorp” or the “Company”) performance and such factors that may affect its future performance. This MD&A should be read in conjunction with the Company’s unaudited consolidated financial statements for the three months ended June 30, 2010 and the related notes contained therein. The Company reports its financial position, results of operations and cash flows in accordance with Canadian generally accepted accounting principles (“Canadian GAAP”). In addition, the following should be read in conjunction with the audited Consolidated Financial Statements of the Company for the year ended March 31, 2010, the related MD&A, the Annual Information Form (available on SEDAR at www.sedar.com), and the annual report on Form 40-F. This MD& A refers to various non-GAAP measures, such as cash flow from operations per share, cash and total production cost per ounce of silver, etc. Those non-GAAP measures are used by the Company to manage and evaluate operating performance and ability to generate cash and are widely reported in the silver mining industry as benchmarks for performance. Non-GAAP measures do not have standardized meaning. Accordingly, non-GAAP measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. To facilitate a better understanding of these measures as calculated by the Company, we have provided detailed descriptions and reconciliations where applicable.

This MD&A is prepared as of August 11, 2010.

1. First Quarter of Fiscal Year 2011 (“Q1 2011”) Highlights and Significant Events 

• Silver production increased 18% to a record 1.4 million ounces, compared to the first quarter of fiscal year 2010 (“Q1 2010”); 

• Net earnings increased 88% to $14.1 million, or $0.09 per share; 

• Sales increased 63% to a record $36.7 million, driven by increased quantities of silver, lead and zinc sold combined with higher realized selling prices; 

• Cash flow from operations increased 123% to $23.2 million, or $0.14 per share; 

• Total production cost of negative $5.21 per ounce of silver and cash cost of negative $6.31 per ounce of silver, making Silvercorp an industry leading low-cost producer; 

• Received the Environmental Permit for the GC Project from the Department of Environmental Protection of Guangdong Province, a key milestone in the mining permit application to the Ministry of Land and Resources of China; 

• Dividend payment of $3.2 million, or CAD$0.02 per share; 

• Total cash, cash equivalents and short term investments increased to $106.1 million. 

2. Operating Results 

(a) Overall View

In Q1 2011, Silvercorp mined 144,982 tonnes of ores, which was 41,059 tonnes, or 40%, more than the 103,923 tonnes of ores mined in Q1 2010, as production from the TLP, HPG, and LM mines continues to grow as mine development progresses. The Company milled 149,189 tonnes of ores, 59,449 tonnes, or 66%, more than the 89,740 tonnes of ores milled in Q1 2010.

In Q1 2011, the Company produced and sold a record 1.4 million ounces of silver, 18.8 million pounds of lead and 4.4 million pounds of zinc, an increase of 18%, 17% and 19%, respectively, compared to the same period last year. The increase was mainly due to the 40% increase of ores mined and 66% increase of ores milled in the quarter. The following table summarizes production, realized selling prices and revenues in each period under review.

Management’s Discussion and Analysis of Financial Condition and Results of Operations Page 1 

SILVERCORP METALS INC. 

Management’s Discussion and Analysis of Financial Condition and Results of Operations 

For the Three Months Ended June 30, 2010 

(Expressed in thousands of U.S. dollars unless otherwise stated) 

	Production			Realized selling prices					Revenue
	(‘000 oz or lb)			($/oz or lb)					(in ‘000 $)
		Q1 2011	Q1 2010			Q1 2011		Q1 2010			Q1 2011		Q1 2010
Silver		1,387	1,175		$	13.92	$	9.89		$	19,308	$	11,624
Gold		1.1	0.3			806.95		572.50			863		171
Lead		18,803	16,043			0.74		0.56			13,959		9,051
Zinc		4,431	3,736			0.59	$	0.46			2,599		1,725
Total										$	36,729	$	22,571

(b) Mining Cost

In Q1 2011, the consolidated total unit mining cost and the cash unit mining cost was $48.61 and $40.33 per tonne, respectively, both decreasing 8% compared to the total unit mining costs of $52.95 and cash mining cost of $43.61 in the same quarter last year. The decrease of cash and total unit costs was mainly due to the production increase during the quarter. With more ore being mined, the unit costs are lower as fixed costs portion were allocated over more units.

The major components of cash mining cost in Q1 2011 were: 41% for mining contractor costs (Q1 2010 – 47%); 14% for materials and supplies (Q1 2010 – 20%); 17% for labour costs (Q1 2010 – 12%); 9% for utility costs (Q1 2010 – 11%) and 19% for other miscellaneous costs (Q1 2010 – 10%).

(c) Milling Cost

In Q1 2011, the consolidated total unit milling cost was $13.62 per tonne and cash unit milling cost was $11.94 per tonne, representing an increase of 13% and 8% respectively from the total unit milling cost of $12.01 per tonne and cash unit milling cost of $11.09 per tonne in the same period last year. The increase of cash and total milling cost per tonne was mainly due to maintenance work at the old mill.

The major components of cash milling costs in Q1 2011 were: 31% for raw materials (Q1 2010 – 43%); 29% for utilities (Q1 2010 – 24%); 16% for mineral resources tax (Q1 2010 – 17%); 14% for labour costs (Q1 2010 – 13%) and 10% for milling related administrative and miscellaneous costs (Q1 2010 –3%).

(d) Cash and Total Cost per Ounce of Silver

Silvercorp continues to achieve industry-leading low production costs per ounce of silver. In Q1 2011, the consolidated total production cost per ounce of silver was negative $5.21 and the cash cost per ounce of silver was negative $6.31, representing 21% and 24% improvement respectively, compared to the total production costs and cash production costs per ounce of silver of negative $4.29 and negative $5.09 respectively in same quarter last year. The improvement was mainly attributable to the increased byproduct credits resulted from higher realized lead and zinc prices.

To facilitate a better understanding of cash and total production cost per ounce of silver (non-GAAP measures), the following tables provide a reconciliation of those measures to the financial statements for the three months ended June 30, 2010 and 2009, respectively.

Management’s Discussion and Analysis of Financial Condition and Results of Operations Page 2 

SILVERCORP METALS INC. 

Management’s Discussion and Analysis of Financial Condition and Results of Operations 

For the Three Months Ended June 30, 2010 

(Expressed in thousands of U.S. dollars unless otherwise stated) 

	Three months ended June 30, 2010
		YING		HPG & LM				TLP			Total
Cost of sales	$	5,258		$	1,081		$	2,325		$	8,664
By-product lead, zinc, and gold sales		(13,054	)		(1,769	)	(2,598		)		(17,421	)
Total adjusted cash costs		(7,796	)		(688	)		(273	)		(8,757	)
Ounces of silver sold		1,147			91			149			1,387
Total cash costs per ounce of silver	$	(6.80	)	$	(7.56	)	$	(1.84	)	$	(6.31	)
Total adjusted cash costs	$	(7,796	)	$	(688	)	$	(273	)	$	(8,757	)
Amortization and depletion		1,111			131			285			1,527
Total adjusted cost of goods sold		(6,685	)		(557	)		12			(7,230	)
Ounces of silver sold		1,147			91			149			1,387
Total production cost per ounce of silver	$	(5.83	)	$	(6.12	)	$	0.08		$	(5.21	)

	Three months ended June 30, 2009
		YING		HPG & LM				TLP			Total
Cost of sales	$	4,529		$	426		$	17		$	4,972
By-product lead, zinc, and gold sales		(10,198	)		(694	)		(55	)		(10,947	)
Total adjusted cash costs		(5,669	)		(268	)		(38	)		(5,975	)
Ounces of silver sold		1,134			34			7			1,175
Total cash costs per ounce of silver	$	(5.00	)	$	(7.88	)	$	(5.24	)	$	(5.09	)
Total adjusted cash costs	$	(5,669	)	$	(268	)	$	(38	)	$	(5,975	)
Amortization and depletion		914			11			4			929
Total adjusted cost of goods sold		(4,755	)		(257	)		(34	)		(5,046	)
Ounces of silver sold		1,134			34			7			1,175
Total production cost per ounce of silver	$	(4.19	)	$	(7.56	)	$	(4.86	)	$	(4.29	)

Management’s Discussion and Analysis of Financial Condition and Results of Operations Page 3 

SILVERCORP METALS INC. 

Management’s Discussion and Analysis of Financial Condition and Results of Operations 

For the Three Months Ended June 30, 2010 

(Expressed in thousands of U.S. dollars unless otherwise stated) 

(e) Operation Review

(i) The following table summarizes historical operating information for each mine and totals for the three months ended June 30, 2010:

Q1 Fiscal 2011	Three months ended June 30, 2010
	YING		HPG & LM		TLP		Total
Production Data
Mine Data
Ore Mined (tonne)
Direct Smelting Ores (tonne)	3,339		77		10		3,426
Stockpiled Ores (tonne)	79,873		17,831		43,852		141,556
	83,212		17,908		43,862		144,982
Run of Mine Ore (tonne)
Direct Smelting Ores (tonne)	3,339		77		10		3,426
Ores Milled (tonne)	81,898		18,076		45,789		145,763
	85,237		18,153		45,799		149,189
Mining cost per tonne of ore mined ($)	55.10		55.23		33.59		48.61
Cash mining cost per tonne of ore mined ($)	43.83		49.64		29.88		40.33
Non cash mining cost per tonne of ore mined ($)	11.27		5.59		3.71		8.28
Unit shipping costs($)	3.71		3.44		2.86		3.41
Milling cost per tonne of ore milled ($)	13.66		12.84		13.88		13.62
Cash milling cost per tonne of ore milled ($)	12.03		11.49		11.96		11.94
Non cash milling cost per tonne of ore milled ($)	1.62		1.36		1.92		1.68
Average Production Cost
Silver ($ per ounce)	3.05		5.54		7.81		3.86
Gold ($ per ounce)	163.66		350.15		460.70		223.89
Lead ($ per pound)	0.16		0.29		0.33		0.21
Zinc ($ per pound)	0.13		0.26		0.33		0.16
Total production cost per ounce of Silver ($)	(5.83	)	(6.12	)	0.08		(5.21	)
Total cash cost per ounce of Silver ($)	(6.80	)	(7.56	)	(1.84	)	(6.31	)
Total Recovery of the Run of Mine Ores
Silver (%)	91.7		89.5		85.1		90.9
Lead (%)	96.4		93.7		89.8		95.2
Zinc ( %)	69.2		60.6		74.0		69.5
Head Grades of Run of Mine Ores
Silver (gram/tonne)	470.5		179.1		115.8		326.3
Lead (%)	8.1		4.8		2.7		6.1
Zinc (%)	2.8		0.7		0.9		2.0
Sales Data
Metal Sales
Silver (in thousands of ounce)	1,147		91		149		1,387
Gold (in thousands of ounce)	0.5		0.4		0.2		1.1
Lead (in thousands of pound)	14,230		1,784		2,789		18,803
Zinc (in thousands of pound)	3,605		209		617		4,431
Metal Sales
Silver ($)	15,956		1,272		2,080		19,308
Gold ($)	373		333		157		863
Lead ($)	10,583		1,298		2,078		13,959
Zinc ($)	2,098		138		363		2,599
	29,010		3,041		4,678		36,729
Average Selling Price, Net of Value Added Tax and Smelter Charges
Silver ($ per ounce)	13.91		13.91		14.00		13.92
Gold ($ per ounce)	745.52		878.63		825.63		806.95
Lead ($ per pound)	0.74		0.73		0.75		0.74
Zinc ($ per pound)	0.58		0.66		0.59		0.59

Management’s Discussion and Analysis of Financial Condition and Results of Operations Page 4 

SILVERCORP METALS INC. 

Management’s Discussion and Analysis of Financial Condition and Results of Operations 

For the Three Months Ended June 30, 2010 

(Expressed in thousands of U.S. dollars unless otherwise stated) 

(ii) The following table summarizes historical operating information for each mine and totals for the three months ended June 30, 2009:

Q1 Fiscal 2010	Three months ended June 30, 2009
	YING		HPG & LM		TLP		Total
Production Data
Mine Data
Ore Mined (tonne)
Direct Smelting Ores (tonne)	3,773		107		5		3,885
Stockpiled Ores (tonne)	82,475		13,379		4,184		100,038
	86,248		13,486		4,189		103,923
Run of Mine Ore (tonne)
Direct Smelting Ores (tonne)	3,773		107		5		3,885
Ores Milled (tonne)	77,330		7,880		645		85,855
	81,103		7,987		650		89,740
Mining cost per tonne of ore mined ($)	52.70		51.89		61.50		52.95
Cash mining cost per tonne of ore mined ($)	42.27		47.82		57.72		43.61
Non cash mining cost per tonne of ore mined ($)	10.43		4.07		3.78		9.34
Unit shipping costs	3.55		3.29		2.72		3.49
Milling cost per tonne of ore milled ($)	11.74		12.66		15.11		12.01
Cash milling cost per tonne of ore milled ($)	10.84		11.67		14.01		11.09
Non cash milling cost per tonne of ore milled ($)	0.90		1.00		1.10		0.92
Average Production Cost
Silver ($ per ounce)	2.52		4.16		1.57		2.59
Gold ($ per ounce)	114.46		241.75		-		149.67
Lead ($ per pound)	0.14		0.23		0.10		0.15
Zinc ($ per pound)	0.12		0.20		-		0.12
Total production cost per ounce of Silver ($)	(4.19	)	(7.53	)	(4.86	)	(4.29	)
Total cash cost per ounce of Silver ($)	(5.00	)	(7.85	)	(5.24	)	(5.09	)
Total Recovery of the Run of Mine Ores
Silver (%)	93.3		88.4		89.9		89.0
Lead (%)	96.5		87.1		94.5		93.5
Zinc ( %)	76.3		75.4		-		71.0
Head Grades of Run of Mine Ores
Silver (gram/tonne)	488.1		225.7		78.7		455.8
Lead (%)	9.1		6.6		5.9		8.8
Zinc (%)	3.1		0.9		-		2.9
Sales Data
Metal Sales
Silver (in thousands of ounce)	1,134		34		7		1,175
Gold (in thousands of ounce)	0.1		0.2		-		0.3
Lead (in thousands of pound)	15,017		929		97		16,043
Zinc (in thousands of pound)	3,579		156		-		3,736
Metal Sales
Silver ($)	11,228		330		66		11,624
Gold ($)	58		113		-		171
Lead ($)	8,489		507		55		9,051
Zinc ($)	1,652		73		-		1,725
	21,427		1,023		121		22,571
Average Selling Price, Net of Value Added Tax and Smelter Charges
Silver ($ per ounce)	9.90		9.71		9.04		9.89
Gold ($ per ounce)	450.03		666.10		-		572.50
Lead ($ per pound)	0.57		0.55		0.57		0.56
Zinc ($ per pound)	0.46		0.47		-		0.46

Management’s Discussion and Analysis of Financial Condition and Results of Operations Page 5 

SILVERCORP METALS INC. 

Management’s Discussion and Analysis of Financial Condition and Results of Operations 

For the Three Months Ended June 30, 2010 

(Expressed in thousands of U.S. dollars unless otherwise stated) 

(iii) Ying Mine (77.5%)

Production from the Ying Mine commenced on April 1, 2006. Since then, the Ying property has become the Company’s primary focus and most profitable project.

In Q1 2011, the Ying Mine mined 83,212 tonnes of ores, representing 3,036 tonnes or a 4% decrease compared to 86,248 tonnes of ores mined in the same period last year. The decrease was mainly because of the 3-day Dragon Boat Day holiday in mid-June 2010. There was no such holiday last year.

In Q1 2011, silver head grade was to 470.5g/t, up 41.2g/t from 429.3g/t in last quarter, and was comparable with 488.1g/t in the same quarter last year. Lead and zinc head grades were 8.1% and 2.8%, respectively, compared to 7.6% and 2.8% in the last quarter and 9.1% and 3.1%, respectively, in the same quarter last year.

In Q1 2011, the Ying Mine produced 1.15 million ounces of silver and 14.2 million pounds of lead, up 37% and 28%, respectively, compared to 836 thousand ounces of silver and 11.1 million pounds of lead in last quarter, and were comparable with 1.13 million ounces of silver and 15 million pounds of lead in the same quarter last year.

In Q1 2011, cash cost per ounce of silver was negative $6.80, representing a 36% improvement compared to the negative $5.00 in Q1 2010. Total cost per ounce of silver was negative 5.83, down 39% from negative $4.19 in Q1 2010. The lower cost was mainly due to higher by-product credits realized from higher lead and zinc prices.

In Q1 2011, the Ying mine incurred $3.0 million (Q1 2010 - $1.8 million) of development and exploration expenditures to expand the mineral resources, to develop underground tunnels, to sink shafts and build declines. A total of 13,443 meters (Q1 2010 – 9,414 meters) of tunnel, 7,483 meters (Q1 2010 – 13,873 meters) of diamond drilling, and 75 meters (Q1 2010 – 278 meters) of shaft were completed.

Subsequent to the quarter end, on July 24, 2010, abnormally heavy rainfall flooded two access tunnels at the Ying Mine and some access roads and equipment were damaged. After recovery work, mining operations at the Ying Mine resumed normal operations on August 2, 2010.

(iv) HPG and LM Mines (80%)

In Q1 2011, the Company’s beneficial ownership interest in HPG and LM mine increased from 70% to 80% as the Company purchased an additional 10% interest in Henan Hua Wei Mining Co. Ltd., the holding company that owns the HPG and LM mines for a consideration of $1.1 million, paid by issuing 163,916 common shares of Silvercorp.

In Q1 2011, HPG and LM mine produced 91 thousand ounces of silver and 1.8 million pounds of lead, representing 168% and 92% increases, respectively, compared to 34 thousand ounces of silver and 0.9 million pounds of lead produced in the same period last year. More ores were mined in the quarter due to increased mine development. In Q1 2011, HPG and LM mined 17,908 tonnes, 4,422 tonnes more than the same quarter last year as the operation at HPG and LM Mines was only partially resumed in Q1 2010 after their suspension in December 2008.

Capital expenditures at HPG and LM mine in Q1 2011 was $858, and a total of 3,906 meters of tunnel, 9,791 meters of diamond drilling, 90 meters of shaft, and 59 meters of decline were completed. In Q1 2010, a total of 3,492 meters of tunnel and 4,383 meters of diamond drilling were completed at a cost of $454, which was expensed as general exploration and property investigation expense on the consolidated statements of operation.

Management’s Discussion and Analysis of Financial Condition and Results of Operations Page 6 

SILVERCORP METALS INC. 

Management’s Discussion and Analysis of Financial Condition and Results of Operations 

For the Three Months Ended June 30, 2010 

(Expressed in thousands of U.S. dollars unless otherwise stated) 

Due to the heavy rainfall on July 24, 2010, one access tunnel was flooded and some access roads and equipment at HPG and LM mines were damaged. As of the date of this report, mining operations at the LM Mine have resumed. It is expected that operations will resume at the HPG mine in one week.

(v) TLP Mine (77.5%)

In Q1 2011, TLP mine produced 149 thousand ounces of silver and 2.8 million pounds of lead compared to only 7 thousand ounces of silver and 97 thousand pounds of lead produced in the same period last year.

In Q1 2011, a total of 43,862 tonnes of ores were mined, representing an increase of 39,673 tonnes compared to the 4,189 tonnes of ores mined in the same period last year as the operation of TLP Mine was partially resumed in Q1 2010 after its suspension in December 2008.

Capital expenditures at TLP in Q1 2011 was $1.3 million, and a total of 5,842 meters (Q1 2010 – 1,759 meters) of tunnel and 8,921 meters (Q1 2010 – 4,405 meters) of diamond drilling were completed.

Damages caused by the heavy rainfall on July 24, 2010 have been repaired. As of the date of this report, mining operations at the TLP Mine have resumed.

(vi) Nabao Project (82%)

The Nabao Project consisted of three exploration permits. In December 2008, the Nabao Project was put on hold and written off as a result of unfavorable exploration results and diminishing prospects for the property due to the high elevation.

During the year ended March 31, 2010, the Company entered into an agreement to dispose of the Nabao Project, consisting of three exploration permits, for $732 (RMB¥5.0 million), to a third party. As of June 30, 2010, $587 (RMB¥4.0 million) was received and two exploration permits have been transferred to the buyer. The transfer of the third exploration permit was still in progress as at June 30, 2010.

(vii) GC Project (95%)

In Q1 2011, GC Project received the Environmental Permit from the Department of Environmental Protection of Guangdong Province, an essential document required for a mining permit application in China. The Company has now submitted an application for a mining permit to the Ministry of Land and Resources (“MOLAR”) in Beijing China. MOLAR has accepted the application along with all supporting documents. The Company expects to receive the mining permit within 45 business days.

Once a full mine permit is granted, the Company plans to commence the construction phase of a 1,500 tonne-per-day mine and mill operation.

(viii) Silvertip Project (100%)

Silvertip Project was acquired in February 2010. During the first quarter ended June 30, 2010, the Company has assembled a professional exploration team and obtained surface exploration approval at Silvertip Project. An airborne geophysical survey program and high flow water quality and hydrology envision sampling surveys are underway. Surface diamond drilling program, with a target of 20,000 meters commenced in August 2010. The Company has also commissioned a study for the design of mine waste disposal and site water management facilities. In Q1 2010, capital expenditures at Silvertip Project were $0.5 million.

Management’s Discussion and Analysis of Financial Condition and Results of Operations Page 7 

SILVERCORP METALS INC. 

Management’s Discussion and Analysis of Financial Condition and Results of Operations 

For the Three Months Ended June 30, 2010 

(Expressed in thousands of U.S. dollars unless otherwise stated) 

3. Annual Financial Results 

The following table sets out highlights of Silvercorp’s financial results together with selected balance sheet information for the years ended March 31, 2010, 2009, and 2008.

		2010			2009			2008
Sales	$	107,164		$	83,523		$	108,363
Gross profit		79,264			47,836			85,041
Expenses		17,246			11,743			12,613
Impairment charges		698			50,707			-
Other items		(875	)		(789	)		7,257
Net income (loss)		38,547			(15,997	)		59,937
Basic earnings (loss) per share		0.24			(0.11	)		0.41
Diluted earnings (loss) per share		0.24			(0.11	)		0.40
Total assets		279,454			205,202			190,267
Total shareholders equity		214,990			152,446			148,992
Cash dividend declared		12,136			8,030			6,891
Cash dividend declared per share (C$/share)		0.08			0.06			0.05

4. Summary of Quarterly Financial Results 

The tables below set out highlights of Silvercorp’s quarterly results for the past eight quarters.

		June 30,		March 31,		December 31,			September 30,
		2010		2010		2009			2009
Sales	$	36,729	$	28,224	$	31,283		$	25,085
Gross profit		26,538		19,277		24,230			19,088
Expenses and foreign exchange		5,511		3,936		5,156			3,785
Impairment charges and bad debt (recovery)		-		-		-			(79	)
Other items		807		18		(87	)		(840	)
Net income		14,101		9,760		12,409			8,893
Basic earnings per share		0.09		0.06		0.08			0.06
Diluted earnings per share		0.09		0.06		0.08			0.05
Cash dividend declared		3,109		3,238		3,108			3,020
Cash dividend declared per share (CAD)		0.02		0.02		0.02			0.02

		June 30,		March 31,			December 31,			September 30,
		2009		2009			2008			2008
Sales	$	22,571	$	17,392		$	15,168		$	20,103
Gross profit		16,670		11,010			5,240			10,234
Expenses and foreign exchange		4,394		2,148			4,087			1,631
Impairment charges		777		2,907			47,433			-
Other items		60		(224	)		(246	)		(910	)
Net income (loss)		7,487		1,238			(33,695	)		4,857
Basic earnings (loss) per share		0.05		0.01			(0.22	)		0.03
Diluted earnings (loss) per share		0.05		0.01			(0.22	)		0.03
Cash dividend declared		2,770		2,564			2,476			2,990
Cash dividend declared per share (CAD)		0.02		0.02			0.02			0.02

Management’s Discussion and Analysis of Financial Condition and Results of Operations Page 8 

SILVERCORP METALS INC. 

Management’s Discussion and Analysis of Financial Condition and Results of Operations 

For the Three Months Ended June 30, 2010 

(Expressed in thousands of U.S. dollars unless otherwise stated) 

5. Financial results for the First Quarter of 2011 

Net income (attributable to the Company’s shareholders) in Q1 2011 was $14.1 million, or $0.09 per share, an increase of 88% over the earnings of $7.5 million or $0.05 per share in the same quarter last year. Net earnings improved primarily due to the higher metal production combined with higher realized metal prices in the quarter.

Sales in Q1 2011 were a record of $36.7 million, an increase of 63% from $22.6 million in the same quarter last year. The increase was driven by higher quantities of metals sold combined with higher realized metal prices. In Q1 2011, the Company sold a record 1.4 million ounces of silver, 18.8 million pounds of lead, and 4.4 million pounds of zinc, representing an increase of 18%, 17%, and 19%, respectively, compared to 1.2 million ounces of silver, 16.0 million pounds of lead, and 3.7 million pounds of zinc in Q1 2010. The average realized selling prices for silver, lead, and zinc also increased to $13.92/oz., $0.74/lb., and $0.59/lb., increased 41%, 32%, and 28%, respectively, compared with the metal prices realized in Q1 2010.

Cost of goods sold in Q1 2011 were $10.2 million, compared to the $5.9 million in Q1 2010. The cost of goods sold includes $8.7 million (same period last year - $5.0 million) for cash costs and $1.5 million (same period last year - $0.9 million) for amortization, depletion and depreciation charges. The cost of good sold increased as 40% more ores were mined and 66% more ores were milled in the quarter, compared with the same quarter last year.

Gross profit margin in Q1 2011 was 72%, slightly lower than the margin of 74% in the same quarter last year. Partially offset by higher realized selling prices, the decrease of gross margin was mainly because overall head grade decreased to 326.3g/t from 455.8g/t in the same quarter last year, as production of ores from HPG, LM and TLP mines, which have lower grades compared to the Ying Mine, increased.

Accretion on asset retirement obligation in Q1 2011 was $40, which was $10 higher than accretion expenses of $30 recorded in the same period last year as the asset retirement obligation was higher. In March 2010, the Company revisited the reclamation costs for the existing mines and the timing to settle the reclamation liabilities as a result of new environmental regulations in China as well as the extension of mine lives and updated reserves and resources. As a result, the undiscounted assets retirement obligation was upward revised to $3.9 million, representing 26% increase, compared to previous estimates of $3.1 million.

Foreign exchange gain in Q1 2011 was $544 (Q1 2010 - $1,516). The unrealized foreign exchange gain of $873 resulted from holding U.S. dollar denominated term deposits was offset by the unrealized foreign exchange loss of $329 generated from the translation of Chinese Yuan denominated monetary items in the Company’s integrated operations to Canadian Dollar.

General exploration and property investigation expenses in Q1 2011 were $1.3 million, a decrease of $1.0 million from the expenses of $2.3 million recorded in the same period last year. In Q1 2010, a total of $1.3 million exploration expenditures incurred at TLP, HPG, and LM was charged to general exploration expenses on the statement of operation as the mine operations of TLP, HPG, and LM were suspended in December 2008.

Investor relations expenses of $85 in Q1 2011, representing an increase of 20% over the $71 of investor relation expenses recorded in the same period last year as the Company participated in comparatively more investor relation events during the quarter.

General and administrative, including stock based compensation expense of $0.8 million (Q1 2010 -$0.4 million), was $4.2 million in Q1 2011, representing an increase of $1.5 million compared to the expenses of $2.7 million incurred in the same period last year. The increase was mainly attributable to $1.1 million performance bonus recorded in the quarter (Q1 2010 - $nil).

Management’s Discussion and Analysis of Financial Condition and Results of Operations Page 9 

SILVERCORP METALS INC. 

Management’s Discussion and Analysis of Financial Condition and Results of Operations 

For the Three Months Ended June 30, 2010 

(Expressed in thousands of U.S. dollars unless otherwise stated) 

Professional fees in Q1 2011 were $0.2 million compared to professional fees of $0.6 million in the same period last year. The higher professional fee recorded in Q1 2010 was mainly due to the fees related to the Klondex unsolicited take over bid, which was terminated in July 2009.

Impairment charges and bad debt in Q1 2011 was $nil compared to impairment charges of $0.8 million recorded in the same period last year. The impairment charges recorded in Q1 2010 included a write down of an accounts receivable of $582 relating to a disposal of an exploration permit in fiscal 2008, and a $195 unrealized loss on the investment in Dajin Resources Corp., which was an accounting reclassification from accumulated other comprehensive loss.

Equity loss on investment in NUX in Q1 2011 was $38, representing a decrease of 54% compared to the loss of $82 recorded in the same period last year. The Company holds 23.2% shares of New Pacific Metals Corp. (“NUX”) and, accordingly, records on the Company’s statement of operations its proportionate share NUX’s net loss (or income).

Interest income in Q1 2011 was $265, representing an increase of $20 compared to interest income of $245 recorded in the same period last year. The increase was mainly because more cash was invested in term deposits in China to earn higher interest income during the current period.

Income tax expenses in Q1 2011 were $3.3 million, an increase of 134% or $1.9 million over the income tax expense of $1.4 million recorded in the same period last year. The income tax expenses recorded in Q1 2011 included current income tax expenses of $2.7 million (Q1 2010 – $1.6 million) and a future income tax expense of $535 (Q1 2010 – recovery of $186). The increase of current income tax expense was the results of higher taxable income recorded in the current quarter, and the increase of future income tax expense was mainly the reversal of temporary differences of asset balances between accounting basis and taxation basis.

6. Liquidity and Capital Resources 

(a) Working Capital

As at June 30, 2010, working capital increased by 14% or $11.5 million to $91.2 million (March 31, 2010 - $79.7 million) comprised mainly of cash and cash equivalents of $47.5 million (March 31, 2010 -$50.6 million), short term investments of $58.6 million (March 31, 2010 - $44.0 million), accounts receivable, prepaids and deposits of $2.4 million (March 31, 2010 - $2.5 million), inventories of $2.7 million (March 31, 2010 - $3.2 million), and other current assets of $0.2 million (March 31, 2010 - $0.3 million) offset by current liabilities of $20.3 million (March 31, 2010 - $20.9 million). The increase in working capital is mainly due to the $23.2 million of cash generated by the operating activities in Q1 2011.

(b) Cash and Cash Equivalents, and Short Term Investments

Cash and cash equivalents plus short-term investments increased by $11.4 million or 12% to $106.1 million (March 31, 2010 - $94.7 million). The increase is mainly due to the $23.2 million cash generated by the operating activities in fiscal 2011, offset by $6.7 million of capital expenditures, $3.2 million of cash dividends payments, and $1.5 million repayment of a bank loan.

(c) Cash Flows

Operating activities generated $23.2 million in Q1 2011, an increase of $12.8 million, compared to $10.4 million in same period last year. Prior to changes in non-cash working capital items, which generated $1.7 million cash in Q1 2011 (Q1 2010 - used $0.7 million), cash flow from operating activities in Q1 2011 was $21.5 million (Q1 2010 - $11.1 million). The higher operating cash flow in Q1 2011 was mainly because of higher sales achieved due to the substantial improvement of metal prices and increased quantity of metals sold compared to same period last year.

Management’s Discussion and Analysis of Financial Condition and Results of Operations Page 10 

SILVERCORP METALS INC. 

Management’s Discussion and Analysis of Financial Condition and Results of Operations 

For the Three Months Ended June 30, 2010 

(Expressed in thousands of U.S. dollars unless otherwise stated) 

Investing activities used $22.1 million in Q1 2011 (Q1 2010 - provided $1.1 million), as a result of acquisition, exploration and development expenditures of $5.1 million (Q1 2010 - $2.2 million), acquisition of equipment of $0.8 million (Q1 2010 - $0.4 million); increase of term deposits of $15.4 million (Q1 2010 - redemption of $4.1 million), and prepayments to acquire plant and equipment of $0.8 million (Q1 2010 - $0.4 million).

Financing activities used $3.5 million in Q1 2011 (Q1 2010 - $0.5 million), which mainly consisted of: cash dividends to Silvercorp shareholder of $3.2 million (Q1 2010 - $2.8 million), and repayment of bank loan and notes payable of $1.5 million (Q1 2010 - net proceeds of $2.3 million from bank loan and notes payable), offset by proceeds from issuance of common shares of $1.2 million (Q1 2010 - $nil).

(d) Contractual Commitments and Contingencies

Commitments, not disclosed elsewhere in this Management’s Discussion and Analysis, are as follows:

The Company entered into office rental agreements (the “Rental Agreements”), with total rental expense of $1,213 over the next four years as follows:

		2011		2012		2013		2014		Total
Rental expense	$	250	$	363	$	346	$	254	$	1,213

(e) Available Sources of Funding

The Company does not have unlimited resources and its future capital requirements will depend on many factors, including, among others, cash flow from operations. To the extent that its existing resources and the funds generated by future income are insufficient to fund the Company’s operations, the Company may need to raise additional funds through public or private debt or equity financing. If additional funds are raised through the issuance of equity securities, the percentage ownership of current shareholders will be reduced and such equity securities may have rights, preferences or privileges senior to those of the holders of the Company’s common stock. No assurance can be given that additional financing will be available or that, if available, can be obtained on terms favourable to the Company and its shareholders. If adequate funds are not available, the Company may be required to delay, limit or eliminate some or all of its proposed operations. The Company bel ieves it has sufficient capital to meet its cash needs for the next 12 months, including the costs of compliance with continuing reporting requirements.

7. Financial Instruments and Related Risks 

The Company manages its exposure to financial risks, including liquidity risk, foreign exchange rate risk, interest rate risk, credit risk and equity price risk in accordance with its risk management framework. The Company’s Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework and reviews the Company’s policies on an ongoing basis.

The following table sets forth the Company’s financial assets and liabilities that are measured at fair value on a recurring basis by level within the fair value hierarchy. As at June 30, 2010, those financial assets and liabilities are classified in their entirety based on the level of input that is significant to the fair value measurement.

Management’s Discussion and Analysis of Financial Condition and Results of Operations Page 11 

SILVERCORP METALS INC. 

Management’s Discussion and Analysis of Financial Condition and Results of Operations 

For the Three Months Ended June 30, 2010 

(Expressed in thousands of U.S. dollars unless otherwise stated) 

		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	47,496	$	-	$	-	$	47,496
Short term investments: warrants		-		-		209		209
Short term investments: other than warrants		58,381		-		-		58,381
Receivables and deposits		-		1,313		-		1,313
Amounts due from related parties		-		149		-		149
Restricted cash		-		75		-		75
Available-for-sale marketable securities		1,487		-		-		1,487
Financial liabilities
Accounts payable and accrued liabilities	$	-	$	11,478	$	-	$	11,478
Deposits received		-		3,370		-		3,370
Dividends payable		-		3,109		-		3,109

8. Off-Balance Sheet Arrangements 

The Company does not have any off-balance sheet arrangements.

9. Transactions with Related Parties 

Related party transactions not disclosed elsewhere in the Management’s Discussion and Analysis are as follows:

Amount due from related parties		June 30, 2010		March 31, 2010
New Pacific Metals Corp. (a)	$	149	$	136
	Three months ended June 30,
Transactions with related parties		2010		2009
New Pacific Metals Corp. (a)	$	59	$	35
Quanfa Exploration Consulting Services Ltd. (b)		-		88
McBrighton Consulting Ltd.(c)		55		44
R. Feng Consulting Ltd. (d)		82		82
	$	196	$	249

(a)

New Pacific Metals Corp. is a publicly traded company with director and officers in common with the Company. Further to a services and administrative costs reallocation agreement between the Company and NUX, the Company will recover costs for services rendered to NUX and expenses incurred on behalf of NUX. During the three months ended June 30, 2010, the Company recovered $59 (three months ended June 30, 2009 - $35) from NUX for services rendered and expenses incurred on behalf of NUX. The costs recovered from NUX were recorded as a direct reduction of general and administrative expenses on the consolidated statements of operations.

(b)

Quanfa Exploration Consulting Services Ltd. (“Quanfa”) is a private company with majority shareholders and management from the senior management of Henan Found and Henan Huawei. During the three months ended June 30, 2010, the Company paid $nil (three months ended June 30, 2009 - $88) to Quanfa for its consulting services provided.

Management’s Discussion and Analysis of Financial Condition and Results of Operations Page 12 

SILVERCORP METALS INC. 

Management’s Discussion and Analysis of Financial Condition and Results of Operations 

For the Three Months Ended June 30, 2010 

(Expressed in thousands of U.S. dollars unless otherwise stated) 

(c)	During the three months ended June 30, 2010, the Company paid $55 (three months ended June 30, 2009 - $44) to McBrighton Consulting Ltd., a private company controlled by a director of the Company for consulting services.
(d)	During the three months ended June 30, 2010, the Company paid $82 (three months ended June 30, 2009 - $82) to R. Feng Consulting Ltd., a private company controlled by a director of the Company for consulting services.

The transactions with related parties during the year are measured at the exchange amount, which is the amount of consideration established and agreed by the parties. The balances with related parties are unsecured, non-interest bearing, and due on demand.

10. Critical Accounting Policies and Estimates 

The preparation of financial statements in conformity with Canadian GAAP requires management to make estimates and assumptions that affect the amounts reported on the Consolidated Financial Statements. Theses critical accounting estimates represent management estimates that are uncertain and any changes in these estimates could materially impact the Company’s financial statements. Management continuously reviews its estimates and assumptions using the most current information available. There has no change to the Company’s critical accounting policies and estimates since fiscal year 2010 ended March 31, 2010. Readers are encouraged to read the critical accounting policies and estimates as described in the Company’s audited consolidated financial statements and Management’s Discussion and Analysis for the year ended March 31, 2010.

11. Future Accounting Changes 

(a) Multiple deliverable revenue arrangements

In December 2009, the EIC issued EIC Abstract 175, “Multiple Deliverable Revenue Arrangements”. This EIC addresses how to determine whether an arrangement involving multiple deliverables contains more than one unit of accounting and how such a multiple deliverable revenue arrangement consideration should be measured and allocated to the separate units of accounting. This EIC should be applied prospectively and should be applied to revenue arrangements with multiple deliverables entered into or materially modified in the first annual fiscal period beginning on or after January 1, 2011. Early adoption is permitted. The Company did not early adopt this EIC and upon adoption does not expect it to have a material impact on the Company’s consolidated financial statements.

(b) Convergence with IFRS

In February 2008, the Canadian Accounting Standards Board confirmed that publicly accountable enterprises will be required to adopt International Financial Reporting Standards (“IFRS”) for fiscal years beginning on or after January 1, 2011, with early adoptions permitted. Accordingly, the Company plans to adopt IFRS for fiscal years beginning April 1, 2011. The Company’s first IFRS financial statements will be its interim financial statements for the first quarter of fiscal 2012 with an opening balance sheet date of April 1, 2011, which will require restatement of comparative information presented.

The conversion to IFRS will impact the Company’s accounting policies, information technology and data systems, internal control over financial reporting, and disclosure controls and procedures. The transition may also impact business activities, such as certain contractual arrangements, debt covenants, capital requirements and compensation arrangements.

The Company has designated the appropriate resources to the conversion project to develop an effective plan and continues to assess resource and training requirements as the project progresses. The

Management’s Discussion and Analysis of Financial Condition and Results of Operations Page 13 

SILVERCORP METALS INC. 

Management’s Discussion and Analysis of Financial Condition and Results of Operations 

For the Three Months Ended June 30, 2010 

(Expressed in thousands of U.S. dollars unless otherwise stated) 

Company’s conversion plan consists of the following four phases: scoping and planning, diagnostic assessment, operations implementation and post implementation. The Company has completed the scoping and planning phase. The scoping and planning phase involved establishing a project management team, mobilizing organizational support for the conversion plan, obtaining stakeholder support for the project, identifying major areas affected by the conversion and developing a project charter, implementation plan and communication strategy. The resulting identified areas of accounting difference of highest potential impact to the Company, based on existing IFRS, are business combinations, impairment of assets, property plant and equipment, provisions and contingent liabilities, exploration and evaluation expenditures, income taxes, financial instruments and initial adoption of IFRS under the provisions of IFRS 1 First-Time Adoption of IFRS.

The diagnostic assessment phase (“phase 2”) which is in progress will result in the selection of IFRS accounting policies and transitional exemptions decisions, estimates of quantification of financial statement impacts, preparation of shell financial statements and identification of business processes and resources impacted. The Company has completed the selection of IFRS accounting policies and transitional exemptions decisions. Estimates of the quantified impacts of anticipated changes to the Company’s current accounting policies on the Company’s IFRS opening balance sheet have been substantially completed and business processes and resources impacted have been identified. The Company’s IFRS transition date balance sheet as at April 1, 2010 is scheduled to be reviewed by Audit Committee in the third quarter of fiscal 2011. As a result of phase 2, the Company has identified the key areas where changes in accounting policy are expected on our transitio n from Canadian GAAP to IFRS listed below. This list is intended to highlight the areas that we have determined to be the most significant and should not be regarded as a complete list of changes that will result from the transition to IFRS. As noted above, the Company has substantially, but not yet fully completed the quantification of the impact of these changes at this stage in our conversion project.

IFRS 1, “First time adoption of International Financial Reporting Standards”, generally requires that all IFRS standards and interpretations be accounted for on a retrospective basis. IFRS 1 provides for certain optional exemptions and other mandatory exceptions to this general principal. The most significant IFRS optional exemptions which we are likely to apply are:

Exemption	Summary of exemption and decision
IFRS 2, Share-based payments	Full retrospective application may be avoided for certain share-based instruments depending on the grant date, vesting terms and settlement of any related liabilities.
IFRS 3, Business combinations	Allows an entity that has conducted prior business combinations to apply IFRS 3 on a prospective basis from the date of transition. This avoids the requirement to restate prior business combinations.
IAS 21, Cumulative translation differences	Allows an entity to deem all cumulative translation differences to be zero at the date of transition.
IAS 23, Borrowing costs	This exemption allows a first time adopter to apply IAS 23(revised) from the date of transition to IFRS for all qualifying assets for which the capitalization start date is on or after that date.
IAS 27, Non-controlling interests	Allows an entity to apply IAS 27 paragraphs 28, 30, 31, and 34-37 on a prospective basis from the date of transition. This avoids the requirement to restate non-controlling interests that had a deficit balance in prior periods.

Management’s Discussion and Analysis of Financial Condition and Results of Operations Page 14 

SILVERCORP METALS INC. 

Management’s Discussion and Analysis of Financial Condition and Results of Operations 

For the Three Months Ended June 30, 2010 

(Expressed in thousands of U.S. dollars unless otherwise stated) 

IAS 27, Investments in subsidiaries, jointly controlled entities and associates	Allows a first time adopter to measure its investments in subsidiaries, jointly controlled entities and associates at either (a) cost; or (b) fair value at the entity’s date of transition as deemed cost.
IFRIC 1, Decommissioning liabilities	This exemption allows a first time adopter to utilize a more straightforward methodology for measuring the liability and cost of the related asset
Fair value as deemed cost	An entity can elect to measure an asset at the date of transition to IFRS at its fair value, and use that fair value as its deemed cost at that date.

The operations implementation phase (“phase 3”) includes the design of business, reporting and system processes to support the compilation of IFRS compliant financial data for the IFRS opening balance sheet at April 1, 2011, fiscal 2012 and thereafter. Phase 3 also includes ongoing training, testing of the internal control environment and updated processes for disclosure controls and procedures. Changes to the reporting and system processes to support preparation of the IFRS opening balance sheet at April 1, 2011 are expected to be implemented by the middle of fiscal 2011.

Post implementation (“phase 4”) will include sustainable IFRS compliant financial data and processes for fiscal 2012 and beyond. The International Accounting Standards Board continues to amend and add to current IFRS standards with several projects currently underway. The Company’s conversion process includes monitoring actual and anticipated changes to IFRS standards and related rules and regulations and assessing the impacts of these changes on the Company and its reporting, including expected dates of when such impacts are effective.

(c) Business combination and related sections

In January 2009, the CICA issued Section 1582 “Business Combinations” to replace Section 1581. The new standard effectively harmonizes the business combinations standard under Canadian GAAP with IFRS. The new standard revises guidance on the determination of the carrying amount of the assets acquired and liabilities assumed, goodwill and accounting for non-controlling interests at the time of a business combination.

The CICA concurrently issued Section 1601 “Consolidated Financial Statements” and Section 1602 “Non-controlling Interests”, which replace Section 1600 “Consolidated Financial Statements”. Section 1601 provides revised guidance on the preparation of consolidated financial statements and Section 1602 addresses accounting for non-controlling interests in consolidated financial statements subsequent to a business combination.

The new standards will become effective on January 1, 2011 with early adoption available. The Company did not adopt these new standards but continues to evaluate the attributes of early adoption of these standards and their potential effects.

12. Other MD&A Requirements 

Additional information relating to the Company:

(a) may be found on SEDAR at www.sedar.com;

(b) may be found at the Company’s web-site www.silvercorpmetals.com;

(c) may be found in the Company’s Annual Information Form; and,

(d) is also provided in the Company’s annual audited consolidated financial statements as of March 31, 2010.

Management’s Discussion and Analysis of Financial Condition and Results of Operations Page 15 

SILVERCORP METALS INC. 

Management’s Discussion and Analysis of Financial Condition and Results of Operations 

For the Three Months Ended June 30, 2010 

(Expressed in thousands of U.S. dollars unless otherwise stated) 

13. Outstanding Share Data 

As at the date of this report, the following securities were outstanding:

(a) Share Capital

Authorized - unlimited number of common shares without par value

Issued and outstanding – 164,982,041 common shares with a recorded value of $149.5 million Shares subject to escrow or pooling agreements - $nil.

(b) Options

As at the date of this report, the outstanding options are comprised of the following:

Number of Options	Exercise Price (CAD$)	Expiry Date
115,299	4.32	23-Jul-2011
581,700	6.74	10-Apr-2012
90,000	6.95	01-Oct-2012
101,700	9.05	16-Jan-2013
50,000	7.54	13-May-2013
375,827	5.99	01-Jul-2013
128,000	3.05	01-Oct-2013
911,816	2.65	19-Apr-2014
413,000	7.00	05-Jan-2015
262,000	7.40	20-Apr-2015
3,029,342

(c) Warrants

As at the date of this report, the outstanding warrants are comprised of the following:

Number of Warrants	Exercise Price (CAD$)	Expiry Date
50,000	$        6.76	30-Jul-2015

14. Risks and Uncertainties 

The Company is exposed to many risks in conducting its business, including but not limit to: metal price risk as the Company derives its revenue from the sale of silver, lead, zinc, and gold; credit risk in the normal course of dealing with other companies and financial institutes; foreign exchange risk as the Company reports its financial statements in USD whereas the Company operates in jurisdictions that utilize other currencies; equity price risk and interest rate risk as the Company has investments in marketable securities that are traded in the open market or earn interest at market rates that are fixed to maturity or at variable interest rates; inherent risk of uncertainties in estimating mineral reserves and mineral resources; political risks; and environmental risk. These and other risks are described in the Company’s Annual Information Form and NI 43-101 technical reports, which are available on SEDAR at www.sedar.com; Form 40F; Audited Consolidated Financial Sta tements; Management’s Discussion and Analysis for the year ended March 31, 2010; and note 13 of the consolidated financial statements for Q1 2011. Readers are encouraged to refer to these documents for a more detailed description of some of the risks and uncertainties inherent to Silvercorp’s business.

Management and the Board of directors continuously assess risks that the Company is exposed to, and attempt to mitigate these risks where practical through a range of risk management strategies.

Management’s Discussion and Analysis of Financial Condition and Results of Operations Page 16 

SILVERCORP METALS INC. 

Management’s Discussion and Analysis of Financial Condition and Results of Operations 

For the Three Months Ended June 30, 2010 

(Expressed in thousands of U.S. dollars unless otherwise stated) 

15. Controls and Procedures 

Silvercorp’s management considers the meaning of internal control to be the processes established by management to provide reasonable assurance about the achievement of the Company’s objectives regarding operations, reporting and compliance. Internal control is designed to address identified risks that threaten any of these objectives.

(a) Management’s Report on Internal Control over Financial Reporting

Management of Silvercorp is responsible for establishing and maintaining an adequate system of internal control, including internal controls over financial reporting. Internal control over financial reporting is a process designed by, or under the supervision of the Chief Executive Officer and the Chief Financial Officer and effected by the Board of Directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with Canadian generally accounting principles. It includes those policies and procedures that:

• pertain to the maintenance of records that accurately and fairly reflect, in reasonable detail, the transactions related to the acquisition and disposition of Silvercorp’s assets, 

• provide reasonable assurance that transactions are recorded as necessary to permit preparation of  financial statements in accordance with generally accepted accounting principles, and receipts and expenditures are made only in accordance with authorization of management and Silvercorp’s directors, and 

• provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of Silvercorp’s assets that could have a material effect on the financial statements. 

The Company’s management, including its Chief Executive Officer and Chief Financial Officer, believe that due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a timely basis. Also, projection of any evaluation of the effectiveness of internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

(b) Changes in Internal Controls over Financial Reporting (“ICFR”)

There was no change in the Company’s internal control over financial reporting that occurred during the period that has materially affected or is reasonably likely to materially affect, its internal control over financial reporting.

Management’s Discussion and Analysis of Financial Condition and Results of Operations Page 17 

SILVERCORP METALS INC. 

Management’s Discussion and Analysis of Financial Condition and Results of Operations 

For the Three Months Ended June 30, 2010 

(Expressed in thousands of U.S. dollars unless otherwise stated) 

16. Directors and Officers 

As at the date of this report, the Company’s Directors and Officers are as follows:

Directors	Officers
Dr. Rui Feng, Director, Chairman & CEO	Dr. Rui Feng, Director, Chairman & CEO
Myles J. Gao, Director, President & COO	Myles J. Gao, Director, President & COO
Yikang Liu, Director	Maria Tang, Chief Financial Officer
Earl Drake, Director	Lorne Waldman, Corporate Secretary
Paul Simpson, Director	Shaoyang Shen, Vice President, China Operations
Greg Hall, Director
Robert Gayton, Director

17. Outlook for Fiscal 2011 

Ying Mining District, Henan Province, China

Due to the temporarily production suspension caused by heavy rainfall on July 24, 2010, Silvercorp revised its Q2 2011 production estimates to 1.2 million ounces, 10% lower than previous forecast. The Company, however, maintains its previous outlook for the whole fiscal year 2011. Production plan is to produce approximately 500,000 tonnes of ore at grades of 360 g/t silver, 8% lead and 1.2% zinc, yielding 5.3 million ounces of silver, 83.7 million pounds of lead and 10.3 million pounds of zinc.

Using the average metal prices in Q1 2011 and the above projected production figures, the Company’s mining operations in fiscal 2011 are expected to generate revenues of over $140 million. Capital expenditures for fiscal 2011 are budged at $13 million at the Ying Mining District -- including $7 million for the Ying mine, $4 million for the TLP mine and $2 million for the HPG and LM mines.

GC Project, Guangdong Province, China

At the GC Project in Guangdong Province, China, Silvercorp submitted a mining permit application to the Ministry of Land and Resources (“MOLAR”). MOLAR has accepted the application along with all supporting documents. The Company expects to receive the mining permit in October 2010. Once the GC mining permit is granted, the Company plans to commence the construction phase for a 1,500 tpd mine and mill operation.

Silvertip Project, British Columbia, Canada

Within the next 12 months, the Company intends to complete the necessary studies required for the submission of a B.C. Small Mine Permit application for an operation with an annual capacity of up to 75,000 tonnes. The Small Mine Permit will allow Silvercorp to commence early production, focusing on higher grade (>1,000 g/t silver equivalent) ore zones that can be accessed from existing tunnels. Expected cash flows from the small mining operation will then help finance further exploration to expand both the resource and future mine operations.

The Company’s first step will be to obtain the necessary permits to de-water the existing underground workings, which is expected to take approximately six months. Once the necessary permits are obtained, and the dewatering occurs, an underground exploration program, including a bulk sample, exploration drilling and a geotechnical assessment, will be carried out.

In addition, a surface drill program will be carried out this summer where previous drill holes have intercepted extensive mineralized zones that were not included in the 2010 resource estimation as the drill holes were too widely spaced. Furthermore, several geophysical and geochemical anomalies located within 5 kilometers of the existing resource areas along the same shale-limestone contact zone previously identified to host high-grade mineralization will also be drill tested. The total capital expenditure budget for calendar year 2010 at the Silvertip project will be approximately $4-5 million.

Management’s Discussion and Analysis of Financial Condition and Results of Operations Page 18 

SILVERCORP METALS INC. 

Management’s Discussion and Analysis of Financial Condition and Results of Operations 

For the Three Months Ended June 30, 2010 

(Expressed in thousands of U.S. dollars unless otherwise stated) 

Future Acquisitions

Silvercorp continues to pursue future growth opportunities by carrying out aggressive exploration programs within existing exploration and mining permit areas at its projects in addition to continually seeking out acquisitions projects in China and other jurisdictions.

Filing of Final Base Shelf Prospectus

Silvercorp has filed a final short form base shelf prospectus with the securities commissions in each of the provinces of Canada, except Quebec, and a corresponding amendment to its registration statement with the United States Securities and Exchange Commission. These filings will allow the Company to make offerings of debt securities (“Debt Securities”), common shares (“Common Shares”), warrants to purchase Common Shares and warrants to purchase Debt Securities (the “Warrants”), or subscription receipts which entitle the holder to receive upon satisfaction of certain release conditions, and for no additional consideration, Common Shares, Warrants or Debt Securities of the Company or any combination thereof (“Subscription Receipts”), (all of the foregoing, collectively, the “Securities”) or any combination thereof up to an aggregate initial offering price of US$120,000,000 during the 25-month period that the final short form ba se shelf prospectus, including any amendments thereto, remains effective. Securities may be offered separately or together, in amounts, at prices and on terms to be determined based on market conditions at the time of sale and set forth in an accompanying shelf prospectus supplement and, subject to applicable regulations, may include ‘at-the-market’ transactions, private placements, public offerings or strategic investments.

Unless otherwise specified in a prospectus supplement, the net proceeds from the sale of the Securities will be used for general corporate purposes, including funding potential future acquisitions and capital expenditures. Each prospectus supplement will contain specific information concerning the use of proceeds from that sale of Securities.

A registration statement relating to these Securities has also been filed with the United States Securities and Exchange Commission but has not yet become effective. These Securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This news release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these Securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.

A copy of the final short form base shelf prospectus may be obtained from the Company’s Corporate Secretary by emailing investor@silvercorp.ca or directing a request to Silvercorp at Suite 1376 - 200 Granville Street, Vancouver, British Columbia, Canada, V6C 1S4, Telephone 1-888-224-1881, Attn: Corporate Secretary, or can be found on SEDAR at www.sedar.com and EDGAR at www.sec.gov.

FORWARD LOOKING STATEMENTS

Certain of the statements and information in this MD&A constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and “forward-looking information” within the meaning of applicable Canadian provincial securities laws. Any statements or information that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects”, “is expected”, “anticipates”, “believes”, “plans”, “projects”, “estimates”, “assumes”, “intends”, “strategies”, “targets”, “goals”, “forecasts”, “objectives”, “budgets”, “schedules”, “potential” or variations thereof or stating that certain action s, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements or information. Forward-looking statements or information relate to, among other things:

Management’s Discussion and Analysis of Financial Condition and Results of Operations Page 19 

SILVERCORP METALS INC. 

Management’s Discussion and Analysis of Financial Condition and Results of Operations 

For the Three Months Ended June 30, 2010 

(Expressed in thousands of U.S. dollars unless otherwise stated) 

• the price of silver and other metals; 

• estimates of the Company’s revenues and capital expenditures; 

• estimated production from the Company’s mines in the Ying Mining District;and 

• timing of receipt of permits and regulatory approvals. 

Forward-looking statements or information are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those reflected in the forward-looking statements or information, including, without limitation, risks relating to,

•  fluctuating commodity prices; 

•  exploration and development programs; 

•  feasibility and engineering reports; 

•  permits and licences; 

•  First Nations title claims and rights; 

•  operations and political conditions; 

•  regulatory environment in China and Canada; and 

•  environmental risks; and 

•  risks and hazards of mining operations. 

This list is not exhaustive of the factors that may affect any of the Company’s forward-looking statements or information. Forward-looking statements or information are statements about the future and are inherently uncertain, and actual achievements of the Company or other future events or conditions may differ materially from those reflected in the forward-looking statements or information due to a variety of risks, uncertainties and other factors, including, without limitation, those referred to in this MD&A under the heading “Risks and Uncertainties” and elsewhere. Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated, described or intended. Accordingly, readers should not place undue reliance on forward-looking statements or information.

The Company’s forward-looking statements and information are based on the assumptions, beliefs, expectations and opinions of management as of the date of this MD&A, and other than as required by applicable securities laws, the Company does not assume any obligation to update forward-looking statements and information if circumstances or management’s assumptions, beliefs, expectations or opinions should change, or changes in any other events affecting such statements or information. For the reasons set forth above, investors should not place undue reliance on forward-looking statements and information.

Management’s Discussion and Analysis of Financial Condition and Results of Operations Page 20 

EX-99.5

Exhibit 99.5

Form 52-109F2
Certification of interim filings - full certificate

I, Rui Feng, Chief Executive Officer of Silvercorp Metals Inc. certify the following:

1.	Review: I have reviewed the interim financial statements and interim MD&A (together, the “interim filings”) of Silvercorp Metals Inc. (the “issuer”) for the interim period ended June 30, 2010.
2.	No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
3.	Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial statements together with the other financial information included in the interim filings fairly present in all material respects the financial condition, results of operations and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.
4.	Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.
5.	Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings

(a)      designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

(i)	material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and
(ii)	information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

(b)      designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.

5.1	Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is the Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
5.2	ICFR – material weakness relating to design: The issuer has disclosed in its interim MD&A for each material weakness relating to design existing at the end of the interim period

(a)      a description of the material weakness;

(b)	the impact of the material weakness on the issuer’s financial reporting and its ICFR; and
(c)	the issuer’s current plans, if any, or any actions already undertaken, for remediating the material weakness.

5.3	N/A
6.	Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on April 1, 2010 and ended on June 30, 2010 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

Date: August 12, 2010

“Rui Feng”
Rui Feng
Chief Executive Officer

2

Form 52-109F2
Certification of interim filings - full certificate

I, Maria Tang, Interim Chief Financial Officer of Silvercorp Metals Inc. certify the following:

1.	Review: I have reviewed the interim financial statements and interim MD&A (together, the “interim filings”) of Silvercorp Metals Inc. (the “issuer”) for the interim period ended June 30, 2010.
2.	No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
3.	Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial statements together with the other financial information included in the interim filings fairly present in all material respects the financial condition, results of operations and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.
4.	Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.
5.	Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings

(a)      designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

(i)	material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and
(ii)	information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

(b)      designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.

5.1	Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is the Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
5.2	ICFR – material weakness relating to design: The issuer has disclosed in its interim MD&A for each material weakness relating to design existing at the end of the interim period

(a)      a description of the material weakness;

(b)	the impact of the material weakness on the issuer’s financial reporting and its ICFR; and
(c)	the issuer’s current plans, if any, or any actions already undertaken, for remediating the material weakness.

5.3	N/A
6.	Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on April 1, 2010 and ended on June 30, 2010 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

Date: August 12, 2010

“Maria Tang”
Meng (Maria) Tang
Interim Chief Financial Officer

2