Filed by e3 Filing, Computershare 1-800-973-3274 - Silvercorp Metals Inc.

NEWS RELEASE


Trading Symbol:	TSX: SVM
	NYSE: SVM

SILVERCORP REPORTS FINANCIAL AND OPERATING RESULTS
FOR THE SECOND QUARTER OF FISCAL 2013

VANCOUVER, British Columbia – November 13, 2012 – Silvercorp Metals Inc. (“Silvercorp” or the “Company”) (TSX: SVM) (NYSE: SVM) today reported its unaudited financial and operating results for the second quarter ended September 30, 2012 (“Q2 2013”).

This earnings release should be read in conjunction with the Company's Management Discussion & Analysis, Financial Statements and Notes to Financial Statements for the corresponding period, which have been posted on SEDAR at www.sedar.com and are also available on the Company's website at www.silvercorp.ca. All figures are in United States dollars unless otherwise stated.

SECOND QUARTER HIGHLIGHTS

Silver production of 1.3 million ounces;
Gold production of 2,481 ounces;
Sales of $45.2 million;
Net income of $9.5 million, or $0.06 per share;
Cash flow from operations of $23.9 million, or $0.14 per share;
Cash costs of negative $0.74 per ounce of silver at the Ying Mining District;
Payment of $4.2 million, or CAD$0.025 per share, in quarterly dividends to shareholders.

FINANCIALS

In Q2 2013, the Company recorded net income attributable to equity holders of the Company of $9.5 million or $0.06 per share, compared to $18.5 million or $0.11 per share, in the quarter ended September 30, 2011 (“Q2 2012”). The decrease compared to prior year was primarily due to lower sales and higher production costs as well as fluctuations in foreign currency.

In Q2 2013, the Company recorded sales of $45.2 million, compared to $62.1 million in Q2 2012. This decrease was due to a lower silver price, which was $30.50 per ounce in Q2 2013, a decrease of 24% compared to $40.13 per ounce in Q2 2012. During the quarter, the Company sold 1.3 million ounces of silver, comparable to the 1.4 million ounces of silver sold in Q2 2012.

Cost of sales in Q2 2013 was $16.4 million, an increase of 14%, compared to $14.4 million in Q2 2012. The cost of sales included cash costs of $13.7 million compared to $11.4 million in Q2 2012. The increase in cost of sales was due to more ore being mined and processed along with a higher production cost per tonne. In Q2 2013, ore production increased by 16% to 240,447 tonnes, while overall production costs increased by 8% to $80 per tonne from $74 per tonne in Q2 2012.

Gross profit margin in Q2 2013 was 64%, compared to 77% in Q2 2012.

Cash flow from operations in Q2 2013 was $23.9 million or $0.14 per share, compared to $35.2 million, or $0.20 per share, in Q2 2012.

Comparing this quarter to the first quarter Fiscal 2013, net income increased $3.4 million or 55%. This increase was attributable to a decrease in overall production costs from $85 per tonne in the prior quarter to $80 per tonne in Q2 2013. As such, the gross profit margin for this quarter improved to 64% compared to 57% in the previous quarter.

For the six months ended September 30, 2012, net income was $15.6 million or $0.09 per share compared to $44.1 million or $0.25 per share, in the same prior year period. During the same comparative periods, sales were $89.8 million compared to $131.8 million, cost of sales were $35.4 million compared to $28.5 million, which resulted in gross profit margins of 61% compared to 78%. Cash flow from operations was $43.2 million compared to $69.1 million over the same periods.

OPERATIONS

On a consolidated basis, in Q2 2013, the Company produced 1.3 million ounces of silver, 2,481 ounces of gold, 13.9 million pounds of lead and 3.5 million pounds of zinc, compared to 1.4 million ounces of silver, 2,516 ounces of gold, 16.5 million pounds of lead and 3.2 million pounds of zinc in Q2 2012.

Compared to production reported for the first quarter of Fiscal 2013, the Company produced an additional 117,000 ounces of silver in Q2 2013. This increase is attributable to a 15% increase in ore mined and processed during the quarter.

As at September 30, 2012, inventory of 480 tonnes of direct smelting ore and 100 tonnes of lead concentrate remains on hand at the Ying Mining District, which is approximately 55,000 ounces of silver produced but not sold.

For the six months ended September 30, 2012, on a consolidated basis, the Company produced 2.5 million ounces of silver, 5,134 ounces of gold, 27.6 million pounds of lead and 6.5 million pounds of zinc, compared to 3.0 million ounces of silver, 3,905 ounces of gold, 37.1 million pounds of lead and 7.3 million pounds of zinc, respectively, in the same prior year period.


1.	Ying Mining District, Henan Province, China

In Q2 2013, the Company mined 205,811 tonnes of ore at the Ying Mining District, an increase of 13%, compared to 182,542 tonnes in Q2 2012. During the quarter, metal production totaled 1.3 million ounces of silver, 1,238 ounces of gold, 13.4 million pounds of lead and 3.4 million pounds of zinc, compared to 1.4 million ounces of silver, 903 ounces of gold, 16.5 million pounds of lead and 3.2 million pounds of zinc in Q2 2012. Compared with metal production in first quarter of Fiscal 2013, there has been a 9% increase in silver production attributable to a 9% increase in ore processed. Grades were 224 grams per tonne (“g/t”) for silver, 3.4% for lead and 1.2% for zinc, compared to 271 g/t for silver, 4.6% for lead and 1.2% for zinc in the same quarter last year.

Compared to Q2 2012, production from HPG, TLP, and LM satellite mines in this quarter increased by 10% and represent 43% of total production at the Ying Mining District compared to 33% in the prior year. The reduction in production from the SGX mine was a result of mechanical problems with one of the shafts which impacted production for 20 days during the quarter. This shaft is fully operational again but as a result of this issue, the Ying Mining District realized lower overall grades in this quarter.

In Q2 2013, total and cash mining costs per tonne were $62.56 and $53.27 respectively compared to $57.23 and $45.74 respectively in Q2 2012. The increase in cash mining costs was due to the following: (i) an increase in labour costs for both the Company’s employees as well as those of its mining contractors of approximately $3.80 per tonne, (ii) an increase in mining administration and

preparation costs of $2.00 per tonne and (ii) the impact of US dollar depreciation versus the Chinese RMB of approximately $1.00 per tonne. Compared to the first quarter of Fiscal 2013, total and cash mining costs decreased by 9% and 4%, respectively.

For the six months ended September 30, 2012, the Company mined 386,829 tonnes of ore at the Ying Mining District, resulting in metal production of 2.5 million ounces of silver, 2,067 ounces of gold, 27.1 million pounds of lead and 6.4 million pounds of zinc, compared to 352,747 tonnes with metal production of 3.0 million ounces of silver, 1,703 ounces of gold, 37.1 million pounds of lead and 7.3 million pounds of zinc in the same prior year period. Grades were 226 g/t for silver, 3.5% for lead, and 1.2% for zinc compared to 287 g/t for silver, 5.0% for lead and 1.4% for zinc, over the same period.

In Q2 2013, a total of 203,170 tonnes of ore were milled, an increase of 13% compared to 180,164 tonnes in Q2 2012. The cash milling cost per tonne decreased to $12.12 from $13.48 in Q2 2012, attributable to the increased tonnage milled. For the six months ended September 30, 2012, a total of 389,625 tonnes of ore were milled compared to 355,091 tonnes in the same prior year period. Over the same period, cash milling cost per tonne were $13.10 compared to $12.78.

Total and cash costs per ounce of silver in Q2 2013 for the Ying Mining District were $1.05 and negative $0.74, compared to negative $2.74 and negative $4.55, respectively in Q2 2012. Compared with first quarter Fiscal 2013, total and cash costs per ounce of silver decreased $1.44 and $0.90 respectively, due to lower overall production costs in Q2 2013.

For the six months ended September 30, 2012, total and cash costs per ounce of silver were $1.75 and negative $0.31 compared to negative $3.75 and negative $5.39, respectively, in the same prior year period.

The operational results for the past five quarters at the Ying Mining District are summarized in the table below:


Quarterly opertional results - Ying Mining District
	Q2 2013		Q1 2013	Q4 2012		Q3 2012		Q2 2012
	30-Sep-12		30-Jun-12	31-Mar-12		31-Dec-11		30-Sep-11
Ore Mined (tonne)
Direct Smelting Ore (tonne)	2,442		2,250	2,761		4,151		2,579
Stockpiled Ore (tonne)	203,369		178,768	132,986		169,926		179,963
	205,811		181,018	135,747		174,077		182,542
Run of Mine Ore (tonne)
Direct Smelting Ore (tonne)	2,442		2,250	2,761		4,151		2,579
Ore Milled (tonne)	200,728		184,205	133,848		171,243		177,586
	203,170		186,455	136,609		175,394		180,165
Metal Sales
Silver (in thousands of ounces)	1,277		1,223	1,082		1,542		1,396
Gold (in thousands of ounces)	1.3		0.8	1.0		1		0.9
Lead (in thousands of pounds)	13,403		13,713	14,668		20,551		16,520
Zinc (in thousands of pounds)	3,412		2,974	2,637		3,525		3,236
Head Grade of Run of Mine Ore
Silver (gram/tonne)	224		227	275		296		271
Lead (%)	3.4		3.6	5.2		5.5		4.6
Zinc (%)	1.2		1.1	1.4		1.4		1.2
Recovery Rate of Run of Mine Ore
Silver (%)	92.7		91.7	93.2		93.3		92.9
Lead (%)	94.3		94	96.4		96.4		95.5
Zinc (%)	69.6		63	64.6		67.7		70.8
Cash Mining Cost ($ per tonne)	53.27		55.47	57.62		55.92		45.74
Total Mining Costs($ per tonne)	62.56		69.02	73.52		70.23		57.23
Cash Milling Cost ($ per tonne)	12.12		14.17	16.84		14.76		13.48
Total Milling Cost ($ per tonne)	13.84		16.05	19.4		16.42		15.03
Cash Cost per Ounce of Silver ($)	(0.74	)	0.16	(4.22	)	(4.64	)	(4.55	)
Total Production Cost per Ounce of Silver ($)	1.05		2.49	(1.84	)	(2.67	)	(2.74	)


2.	BYP Mine, Hunan Province, China

In Q2 2013, the Company mined 26,641 tonnes of ore at the BYP mine with gold head grade of 3.3 g/t compared to 24,754 tonnes with gold head grade of 3.3 g/t in Q2 2012. During the quarter, 1,212 ounces of gold was sold at a cash cost per ounce of gold of $361 compared to 1,613 ounces of gold sold at cash cost per ounce of gold of $276 in the same prior year period.

DEVELOPMENT AND EXPLORATION


1.	Ying Mining District, Henan Province, China

SGX (Ying) Mine

shafts. Silvercorp expects to complete construction of the ramp in calendar 2015 but as construction progresses the ramp is expected to increase production capacity at the SGX mine with effect from the second quarter of Fiscal 2014.

In Q2 2013, the Company also developed 7,300m of horizontal tunnels and completed 15,000m of underground drilling at the SGX mine.

To support the ongoing expansion work at SGX, the Company has also commenced construction of a new 5,000m²facility which will include offices and dormitories.

LM Mine and LM Mine West

During the second quarter of Fiscal 2013 tunnel development on five mining levels at the LM mine continued and two new stopes along the 750m elevation commenced production which contributed to the increase in ore mined during the quarter.

At LM Mine West (“LM West”), the construction of Shaft 969 was completed during the quarter and preparation for tunnel development work is underway. It is expected that Shaft 969 will become operational during the third quarter of Fiscal 2013 and will start to produce ore during the third quarter of Fiscal 2014.

In addition, the Company completed a total of 1,084m of the development work of a 4,800m access ramp at LM West in Q2 2013. The access ramp has already been connected to existing tunnels at LM West and this has vastly improved the tunnels’ ventilation and hauling capacity. It is expected that this new access ramp will contribute to an increase in production by first quarter of Fiscal 2014.

Once Shaft 969, the access ramp and all the mining levels are completed down to the 500m elevation at LM West in Fiscal 2015, the combined production capacity of the two mines is expected to be 300,000 tonnes of ore per year. In order to support the expected growth in operations at the LM Mine and LM West, the Company has commenced construction of a 3,000m²facility which will include offices and a dormitory.

In Q2 2013, the Company also developed 5,000m of decline and horizontal tunnels and completed 12,500m of underground drilling at the LM Mine and LM West.

TLP Mine

In Q2 2013, the Company continued to ramp up production at the TLP mine while developing over 6,400m of horizontal tunnels for mining and underground drilling purpose. The Company also completed 9,700m of underground drilling during the quarter.

HPG Mine

In Q2 2013, the Company began construction of a 400m shaft in the HPG mine to support a future increase in ore production. The Company also developed over 3,200m of decline and horizontal tunnels and completed 4,300m of underground drilling.

Adoption of New Mining Method

At the Ying Mining District, the mining method has been comprised of 40% short-hole shrinkage and 60% resuing, with cut-off grades (before mining dilution) of 300 g/t silver-equivalent (“AgEq”) at the SGX (Ying) mine, and 150 g/t AgEq at the HPG, LM and TLP mines. The resuing method is more selective and is used to mine narrow veins under 0.7m, while the shrinkage method is used to mine wider stopes ranging from 0.8m to 3m.

mining width has been increased and the cut-off grades have been lowered to 150 g/t AgEq at the SGX (Ying) mine, and 110 g/t AgEq at HPG, LM and TLP mines.

The implementation of the new mining method will take place over the next 12 months and the Company expects to gradually increase the use of the shrinkage method at the Ying Mining District from 40% to 80% and reduce the use of the resuing method from 60% to 20%.

The expected benefits of the change in mining method are:


	-	Lower cash mining cost per tonne - the short-hole shrinkage method have a cash mining cost of $32 per tonne compared to $75 per tonne for the resuing method.

	-	Less development work required - due to the increase in mining stope width, less mine tunnel development work will be required to produce the same amount of ore.

	-	Higher tonnage produced - as less tunnelling is required, this is expected to have a positive effect on hauling capacity and therefore allow for an increase in production.

	-	Increase in operational efficiency - reducing the number of stopes required to produce the same amount of ore will result in a more focused and efficient mining operation.

It should be noted that the impact to overall head grades for the Ying Mining District following the adoption of the new mining method is currently unknown.


2.	GC Project, Guangdong Province, China

The Company continued to progress the development of the GC project.

As of September 30, 2012, 376m of the construction of the 618m main shaft was complete. The shaft is expected to reach its designed elevation of -370m in the first quarter of Fiscal 2015. The main access ramp is now 65% complete with a cumulative total of 1,447m of the 2,210m ramp having been developed as at the end of the quarter. In addition to the main access ramp, the Company has also been developing a 4,600m exploration ramp which will provide access to all known veins within a horizontal distance of 250m. As of September 30, 2012, 804m of the exploration ramp was completed.

As at the end of this quarter, all major equipment for the 1,600 t/d floatation mill, including the jaw crusher, cone crusher, ball mills and flotation cells, has been installed and is currently undergoing testing in anticipation of the commencement of production. Remaining work includes secondary concrete casting and installation of auxiliary power equipment. It is expected that the mill will be operational in third quarter of Fiscal 2013.

The construction of a 5.8 kilometre long, 110KV power line and a substation began in late July 2012. As of Q2 2013, the foundation work for 8 of the 13 power lines along with the substation’s building framework has been completed. The power line and substation are expected to be operational by the end of third quarter of Fiscal 2013.

As of Q2 2013, the Company successfully completed and passed a health and safety review of engineering designs for the tailings storage facilities as reported in the previous quarter. Accordingly, the construction of the dry stacking tailings storage facility has resumed and is expected to be complete by the end of the third quarter of Fiscal 2013.

The construction of a lab, administrative offices and dormitory facilities were completed as of Q2 2013.

Assuming a positive final approval to commence operations at GC from the local authorities, the Company continues to expect to be able to commence initial production at GC in early 2013, processing ore stockpiles and maintains its production guidance of 170,000 ounces of silver and 2.7

million pounds of lead and zinc for Fiscal 2013.

In Q2 2013, the Company completed 7,500m of diamond drilling using five underground drill rigs currently on site at the GC project. During the quarter, exploration, mine development, mill and facility construction expenditures at the GC project were $7.3 million, with development expenditure of the project now totalling $40 million as of the end this quarter.


3.	BYP Mine, Hunan Province, China

In Q2 2013, the Company released an update to the BYP mine NI 43-101 technical report, with indicated resources of 292,000 ounces of gold, 187 million pounds of lead and 408 million pounds of zinc.

As of Q2 2013, the Company had completed the excavation work for a 265m deep shaft that will facilitate the mining of the #3 gold mineralization body and the #5 zinc and lead ore body. The installation of shaft equipment and construction of the head frame is currently underway. In addition, the construction of a 1,500 t/d tailing-backfill facility is well underway and is expected to be completed in fourth quarter Fiscal 2013.


4.	X mines (“XBG and XHP projects”), Henan Province, China

At the XHP and XBG projects, construction of a 286m incline shaft and a 225m incline shaft, respectively, are underway with completion expected in the first quarter of Fiscal 2014. During the quarter, approximately 1,400m of tunneling and 6,300m of diamond drilling were also completed at the X mines.

The X mines will continue to focus on the executions of an exploration program that will include surface and underground mapping and systematic sampling, surface and underground diamond drilling, with the intention of defining a NI 43-101 compliant mineral resource. Exploration and mine development at the X mines will be partially supported from cash flows generated from limited tunneling ore and existing ore stockpiles.


5.	RZY Project, Qinghai Province, China

The RZY exploration permit is currently owned by the Qinghai Geological Survey Bureau, the non-controlling interest holder of Qinghai Found Mining Co. (“Qinghai Found”), an 82% owned-subsidiary of the Company. Pursuant to the joint-exploration agreement, Qinghai Found currently owns 67% of the mineral interest in the RZY project, and can acquire up to 82% interest by providing exploration funding of $4.8 million. Upon the completion of exploration funding, the exploration permit will be transferred to Qinghai Found. The Company expects to fund up to $32 million in exploration and capital expenditures for the RZY project.

In Q2 2013, the Company commenced its first diamond drilling program at the RZY project with five diamond drill holes and 833m of drilling completed.


6.	Silvertip Project, British Columbia, Canada

The Company is in the process of preparing a Small Mine Permit application to be submitted to the British Columbia Ministry of Energy and Mines. A Small Mine Permit will allow a 75,000 tonnes per year mining operation.

Myles Gao, P.Geo., President of Silvercorp, is a Qualified Person for Silvercorp under NI 43-101 and has reviewed and given consent to the technical information contained in this News Release.

CONFERENCE CALL AND WEBCAST INFORMATION
An investor conference call will be held on Wednesday, November 14, 2012 at 8 a.m. Pacific Time (11 a.m. Eastern Time) to discuss the results. Participants may join the call by dialing 1-877-240-9772 toll-free or 1-416-340-8527 for calls outside Canada and the U.S.

A live webcast of the conference call, together with supporting presentation slides will be available on the home page of the Company's website, www.silvercorp.ca. The webcast will be archived and available on the Company’s website for up to one year.

An audio replay will be available until November 21, 2012 by calling 1-800-408-3053 toll free or 1-905-694-9451 for calls outside Canada and the U.S. and entering pass code 5953693.

About Silvercorp

Silvercorp is a low-cost silver-producing Canadian mining company with multiple mines in China which has paid a cash dividend since 2007. The Company is currently developing the GC project in southern China which it expects will become its next operating mine in early 2013. The Company’s vision is to deliver shareholder value by focusing on the acquisition of small-scale projects with resource potential and self-fund the growth of those assets. For more information, please visit our website at www.silvercorp.ca.

For further information

Jonathan Hackshaw
Director, Investor Relations

Phone: (604) 669-9397
Toll Free 1(888) 224-1881
Email: investor@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 actions, 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 Camp; 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 from any financing and development of the Company’s properties.

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 the 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, 2012 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.

SILVERCORP METALS INC.

Unaudited Consolidated Balance Sheets

(Expressed in thousands of U.S. dollars)


		September 30, 2012		March 31, 2012
ASSETS
Current Assets
Cash and cash equivalents	$	89,334	$	109,960
Short-term investments		47,236		44,551
Accounts receivable		3,197		12,904
Inventories		7,665		7,006
Due from related parties		369		679
Prepaids and deposits		5,640		5,210
		153,441		180,310
Non-current Assets
Long term prepaids and deposits		5,786		6,015
Investment in an associate		16,534		15,872
Other investments		42,300		45,757
Plant and equipment		80,992		68,788
Mineral rights and properties		288,123		258,521
Deferred income tax assets		-		171
TOTAL ASSETS	$	587,176	$	575,434

LIABILITIES AND EQUITY
Current Liabilities
Accounts payable and accrued liabilities	$	26,738	$	23,590
Deposits received		7,255		7,268
Dividends payable		4,339		4,271
Income tax payable		3,141		5,082
		41,473		40,211
Non-current Liabilities
Deferred income tax liabilities		22,509		19,991
Environmental rehabilitation		4,467		4,400
Total Liabilities		68,449		64,602

Equity
Share capital		232,843		232,678
Contributed surplus		7,108		5,552
Reserves		24,717		24,717
Accumulated other comprehensive income		24,198		25,285
Retained earnings		152,715		145,580
Total equity attributable to the equity holders of the Company		441,581		433,812

Non-controlling interests		77,146		77,020
Total Equity		518,727		510,832

TOTAL LIABILITIES AND EQUITY	$	587,176	$	575,434

SILVERCORP METALS INC.

Unaudited Consolidated Statements of Income

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


		Three Months Ended September 30,						Six Months Ended September 30,
		2012			2011			2012			2011

Sales	$	45,209		$	62,055		$	89,758		$	131,774
Cost of sales		16,446			14,435			35,440			28,494
Gross profit		28,763			47,620			54,318			103,280

General and administrative		6,191			7,456			13,037			12,401
General exploration and property investigation		887			1,209			1,853			3,001
Other taxes		842			1,039			1,648			2,177
Foreign exchange loss (gain)		1,142			(1,284	)		365			(760	)
Loss on disposal of plant and equipment		5			171			25			253
Income from operations		19,696			39,029			37,390			86,208

Share of gain (loss) in an associate		(182	)		116			(189	)		92
Write down of inventories		(348	)		-			(348	)		-
Gain (loss) on investments		693			(670	)		(593	)		(1,829	)
Other income		93			126			168			301
Income before finance items and income taxes		19,952			38,601			36,428			84,772

Finance income		851			1,110			1,842			1,780
Finance costs		(23	)		(23	)		(45	)		(46	)
Income before income taxes		20,780			39,688			38,225			86,506

Income tax expense		7,277			13,786			15,204			26,360
Net income	$	13,503		$	25,902		$	23,021		$	60,146

Attributable to:
Equity holders of the Company	$	9,500		$	18,471		$	15,614		$	44,113
Non-controlling interests		4,003			7,431			7,407			16,033
	$	13,503		$	25,902		$	23,021		$	60,146
Earnings per share attributable to the equity holders of the Company
Basic earnings per share	$	0.06		$	0.11		$	0.09		$	0.25
Diluted earnings per share	$	0.06		$	0.11		$	0.09		$	0.25
Weighted Average Number of Shares Outstanding - Basic		170,719,933			173,664,959			170,706,702			174,343,192
Weighted Average Number of Shares Outstanding - Diluted		171,062,715			174,282,790			171,072,838			175,122,557

SILVERCORP METALS INC.

Unaudited Consolidated Statements of Cash Flow

(Expressed in thousands of U.S. dollars)


		Three Months Ended September 30,						Six Months Ended September 30,
		2012			2011			2012			2011
Cash provided by
Operating activities
Net income	$	13,503		$	25,902		$	23,021		$	60,146
Add (deduct) items not affecting cash:
Accretion of environmental rehabilitation		23			23			45			46
Depreciation, amortization and depletion		3,114			3,294			7,190			5,881
Share of loss (gain) in an associate		182			(116	)		189			(92	)
Write down of inventories		348			-			348			-
Deferred income tax expense		129			4,379			3,113			5,507
Loss (gain) on investments		(693	)		670			593			1,829
Loss on disposal of plant and equipment		5			171			25			253
Stock-based compensation		872			841			1,608			1,619
Changes in non-cash operating working capital		6,434			15			7,037			(6,075	)
Net cash provided by operating activities		23,917			35,179			43,169			69,114

Investing activities
Mineral rights and properties
Capital expenditures		(14,097	)		(7,326	)		(26,413	)		(13,701	)
Plant and equipment
Additions		(5,328	)		(6,018	)		(13,485	)		(10,150	)
Investments
Acquisition		(80	)		-			(595	)		(1,020	)
Net purchases of short-term investments		12,457			12,813			(2,355	)		7,820
Acquisition of Zhongxing/Chuanxin (net of cash acquired, $20)		-			(3,403	)		-			(3,403	)
Prepayments to acquire mineral property, plant and equipment		(2,629	)		(19,989	)		(4,100	)		(21,095	)
Net cash used in investing activities		(9,677	)		(23,923	)		(46,948	)		(41,549	)

Financing activities
Net repayment from (advance to) related parties		253			(11,113	)		310			(12,290	)
Non-controlling interests
Contribution		-			578			-			5,158
Distribution		(7,388	)		-			(7,388	)		-
Cash dividends distributed		(4,220	)		(3,705	)		(8,525	)		(7,305	)
Share capital
Proceeds from issuance of common shares		19			61			113			951
Normal course issuer bid		-			(35,380	)		-			(35,380	)
Net cash used in financing activities		(11,336	)		(49,559	)		(15,490	)		(48,866	)
Effect of exchange rate changes on cash and cash equivalents		2,775			(3,330	)		(1,357	)		(1,880	)
Increase (decrease) in cash and cash equivalents		5,679			(41,633	)		(20,626	)		(23,181	)
Cash and cash equivalents, beginning of the period		83,655			165,676			109,960			147,224
Cash and cash equivalents, end of the period	$	89,334		$	124,043		$	89,334		$	124,043

SILVERCORP METALS INC.

Mining Data

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


			Three months ended September 30, 2012
	Ying Mining
	District¹		X Mines²		BYP	Total
Production Data
Mine Data
Ore Mined (tonne)
Direct Smelting Ore (tonne)	2,442		-		-	2,442
Stockpiled Ore (tonne)	203,369		7,995	*	26,641	238,005
	205,811		7,995		26,641	240,447
Run of Mine Ore (tonne)
Direct Smelting Ore (tonne)	2,442		-		-	2,442
Ore Milled (tonne)	200,728		27,473		18,564	246,765
	203,170		27,473		18,564	249,207
Mining cost per tonne of ore mined ($)	62.56		-		61.24	62.41
Cash mining cost per tonne of ore mined ($)	53.27		-		25.71	50.11
Non cash mining cost per tonne of ore mined ($)	9.29		-		35.54	12.30
Unit shipping costs($)	3.73		-		-	3.30
Milling cost per tonne of ore milled ($)	13.84		-		17.03	14.11
Cash milling cost per tonne of ore milled ($)	12.12		-		15.50	12.40
Non cash milling cost per tonne of ore milled ($)	1.72		-		1.53	1.70
Average Production Cost
Silver ($ per ounce)	8.21		-		-	8.21
Gold ($ per ounce)	366		-		769	404
Lead ($ per pound)	0.28		-		-	0.28
Zinc ($ per pound)	0.22		-		-	0.22
Total production cost per ounce of Silver ($)	1.05		-			1.05
Total cash cost per ounce of Silver ($)	(0.74	)	-			(0.74	)
Total production cost per ounce of Gold ($)					769	769
Total cash cost per ounce of Gold ($)					361	361
Total Recovery of the Run of Mine Ore
Silver (%)	92.7		-			92.7
Gold (%)					94.1	94.1
Lead (%)	94.3		-			94.3
Zinc (%)	69.6		-		-	69.6
Head Grades of Run of Mine Ore
Silver (gram/tonne)	224		-			224
Gold (gram/tonne)					3.3	3.3
Lead (%)	3.4		-			3.4
Zinc (%)	1.2		-		-	1.2
Sales Data
Metal Sales
Silver (in thousands of ounces)	1,277		9	*	-	1,286
Gold (in thousands of ounces)	1.3		-		1.2	2.5
Lead (in thousands of pounds)	13,403		494	*	-	13,897
Zinc (in thousands of pounds)	3,412		111	*	-	3,523
Metal Sales
Silver (in thousands of $)	29,561		-		-	29,561
Gold (in thousands of $)	1,275		-		1,480	2,755
Lead (in thousands of $)	10,749		-		-	10,749
Zinc (in thousands of $)	2,144		-		-	2,144
	43,729		-		1,480	45,209
Average Selling Price, Net of Value Added Tax and Smelter Charges
Silver ($ per ounce)	23.15		-		-	23.15
Gold ($ per ounce)	1,030		-		1,220	1,111
Lead ($ per pound)	0.80		-		-	0.80
Zinc ($ per pound)	0.63		-		-	0.63

¹Ying Mining District includes mines: SGX (Ying), TLP, HPG&LM.
²X Mines includes the XBG project and XHP project.
* Represents development tunnelling ore at XHP Project.

SILVERCORP METALS INC.

Mining Data

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


	Three months ended September 30, 2011
	Ying Mining
	District¹		X Mines²	BYP	Total
Production Data
Mine Data
Ore Mined (tonne)
Direct Smelting Ore (tonne)	2,579		-	-	2,579
Stockpiled Ore (tonne)	179,963		-	24,754	204,717
	182,542		-	24,754	207,296
Run of Mine Ore (tonne)
Direct Smelting Ore (tonne)	2,579		-	-	2,579
Ore Milled (tonne)	177,585		-	19,813	197,398
	180,164		-	19,813	199,977
Mining cost per tonne of ore mined ($)	57.23		-	44.11	55.66
Cash mining cost per tonne of ore mined ($)	45.74		-	16.95	42.30
Non cash mining cost per tonne of ore mined ($)	11.49		-	27.16	13.36
Unit shipping costs($)	3.78		-	-	3.33
Milling cost per tonne of ore milled ($)	15.03		-	12.53	14.78
Cash milling cost per tonne of ore milled ($)	13.48		-	11.87	13.32
Non cash milling cost per tonne of ore milled ($)	1.54		-	0.66	1.45
Average Production Cost
Silver ($ per ounce)	7.09		-	-	7.09
Gold ($ per ounce)	270		-	599	305
Lead ($ per pound)	0.20		-	-	0.20
Zinc ($ per pound)	0.15		-	-	0.15
Total production cost per ounce of Silver ($)	(2.74	)	-		(2.74	)
Total cash cost per ounce of Silver ($)	(4.55	)	-		(4.55	)
Total production cost per ounce of Gold ($)				599	599
Total cash cost per ounce of Gold ($)				276	276
Total Recovery of the Run of Mine Ore
Silver (%)	92.1		-		92.1
Gold (%)			-	89.1	89.1
Lead (%)	94.7		-		94.7
Zinc ( %)	75.1		-	-	75.1
Head Grades of Run of Mine Ore
Silver (gram/tonne)	271		-		271
Gold (gram/tonne)			-	3.3	3.3
Lead (%)	4.6		-		4.6
Zinc (%)	1.2		-	-	1.2
Sales Data
Metal Sales
Silver (in thousands of ounces)	1,396		-	-	1,396
Gold (in thousands of ounces)	0.9		-	1.6	2.5
Lead (in thousands of pounds)	16,520		-	-	16,520
Zinc (in thousands of pounds)	3,236		-	-	3,236
Metal Sales
Silver (in thousands of $)	42,535		-	-	42,535
Gold (in thousands of $)	1,081		-	2,220	3,301
Lead (in thousands of $)	14,145		-	-	14,145
Zinc (in thousands of $)	2,074		-	-	2,074
	59,835		-	2,220	62,055
Average Selling Price, Net of Value Added Tax and Smelter Charges
Silver ($ per ounce)	30.48		-	-	30.48
Gold ($ per ounce)	1,198		-	1,376	1,313
Lead ($ per pound)	0.86		-	-	0.86
Zinc ($ per pound)	0.64		-	-	0.64

¹Ying Mining District includes mines: SGX (Ying), TLP, HPG&LM.
²X Mines includes the XBG project and XHP project.

SILVERCORP METALS INC.

Mining Data

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


			Six months ended September 30, 2012
	Ying Mining
	District¹		X Mines²		BYP	Total
Production Data
Mine Data
Ore Mined (tonne)
Direct Smelting Ore (tonne)	4,693		-		-	4,693
Stockpiled Ore (tonne)	382,136		10,377	*	54,201	446,714
	386,829		10,377		54,201	451,407
Run of Mine Ore (tonne)
Direct Smelting Ore (tonne)	4,693		-		-	4,693
Ore Milled (tonne)	384,932		31,084		45,163	461,179
	389,625		31,084		45,163	465,872
Mining cost per tonne of ore mined ($)	65.58		-		54.38	64.20
Cash mining cost per tonne of ore mined ($)	54.30		-		23.30	50.49
Non cash mining cost per tonne of ore mined ($)	11.28		-		31.08	13.71
Unit shipping costs($)	3.79		-		-	3.32
Milling cost per tonne of ore milled ($)	14.90		-		15.61	14.97
Cash milling cost per tonne of ore milled ($)	13.10		-		14.36	13.23
Non cash milling cost per tonne of ore milled ($)	1.79		-		1.25	1.74
Average Production Cost
Silver ($ per ounce)	8.77		-		-	8.77
Gold ($ per ounce)	434		-		932	469
Lead ($ per pound)	0.31		-		-	0.31
Zinc ($ per pound)	0.24		-		-	0.24
Total production cost per ounce of Silver ($)	1.75		-			1.75
Total cash cost per ounce of Silver ($)	(0.31	)	-			(0.31	)
Total production cost per ounce of Gold ($)					932	932
Total cash cost per ounce of Gold ($)					488	488
Total Recovery of the Run of Mine Ore
Silver (%)	92.2		-			92.2
Gold (%)	-		-		91.7	91.7
Lead (%)	94.1		-			94.1
Zinc (%)	66.5		-		-	66.5
Head Grades of Run of Mine Ore
Silver (gram/tonne)	226		-			226
Gold (gram/tonne)	-		-		2.8	2.8
Lead (%)	3.5		-			3.5
Zinc (%)	1.2		-		-	1.2
Sales Data
Metal Sales
Silver (in thousands of ounces)	2,500		10	*	-	2,510
Gold (in thousands of ounces)	2.1		0.1	*	2.9	5.1
Lead (in thousands of pounds)	27,116		525	*	-	27,641
Zinc (in thousands of pounds)	6,386		111	*	-	6,497
Metal Sales
Silver (in thousands of $)	57,690		-		-	57,690
Gold (in thousands of $)	2,362		-		3,732	6,094
Lead (in thousands of $)	21,932		-		-	21,932
Zinc (in thousands of $)	4,042		-		-	4,042
	86,026		-		3,732	89,758
Average Selling Price, Net of Value Added Tax and Smelter Charges
Silver ($ per ounce)	23.07		-		-	23.07
Gold ($ per ounce)	1,142		-		1,271	1,187
Lead ($ per pound)	0.81		-		-	0.81
Zinc ($ per pound)	0.63		-		-	0.63

¹Ying Mining District includes mines: SGX (Ying), TLP, HPG&LM.
²X Mines includes the XBG project and XHP project.
* Represents development tunnelling ore at XHP Project.

SILVERCORP METALS INC.

Mining Data

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


			Six months ended September 30, 2011
	Ying Mining
	District¹		X Mines²	BYP	Total
Production Data
Mine Data
Ore Mined (tonne)
Direct Smelting Ore (tonne)	5,686		-	-	5,686
Stockpiled Ore (tonne)	347,061		-	33,667	380,728
	352,747		-	33,667	386,414
Run of Mine Ore (tonne)
Direct Smelting Ore (tonne)	5,687		-	-	5,687
Ore Milled (tonne)	349,404		-	27,777	377,181
	355,091		-	27,777	382,868
Mining cost per tonne of ore mined ($)	58.57		-	32.71	56.32
Cash mining cost per tonne of ore mined ($)	47.15		-	12.46	44.13
Non cash mining cost per tonne of ore mined ($)	11.42		-	20.25	12.19
Unit shipping costs($)	3.80		-	-	3.47
Milling cost per tonne of ore milled ($)	14.33		-	15.05	14.38
Cash milling cost per tonne of ore milled ($)	12.78		-	14.35	12.89
Non cash milling cost per tonne of ore milled ($)	1.55		-	0.70	1.49
Average Production Cost
Silver ($ per ounce)	6.53		-	-	6.53
Gold ($ per ounce)	257		-	513	268
Lead ($ per pound)	0.19		-	-	0.19
Zinc ($ per pound)	0.13		-	-	0.13
Total production cost per ounce of Silver ($)	(3.75	)	-		(3.75	)
Total cash cost per ounce of Silver ($)	(5.39	)	-		(5.39	)
Total production cost per ounce of Gold ($)				513	513
Total cash cost per ounce of Gold ($)				276	276
Total Recovery of the Run of Mine Ore
Silver (%)	91.7		-		91.7
Gold (%)			-	86.7	86.7
Lead (%)	94.7		-		94.7
Zinc ( %)	73.9		-	-	73.9
Head Grades of Run of Mine Ore
Silver (gram/tonne)	287		-		287
Gold (gram/tonne)			-	2.9	2.9
Lead (%)	5.0		-		5.0
Zinc (%)	1.4		-	-	1.4
Sales Data
Metal Sales
Silver (in thousands of ounces)	2,988		-	-	2,988
Gold (in thousands of ounces)	1.7		-	2.2	3.9
Lead (in thousands of pounds)	37,142		-	-	37,142
Zinc (in thousands of pounds)	7,339		-	-	7,339
Metal Sales
Silver (in thousands of $)	90,291		-	-	90,291
Gold (in thousands of $)	1,923		-	2,909	4,832
Lead (in thousands of $)	32,081		-	-	32,081
Zinc (in thousands of $)	4,570		-	-	4,570
	128,865		-	2,909	131,774
Average Selling Price, Net of Value Added Tax and Smelter Charges
Silver ($ per ounce)	30.22		-		30.22
Gold ($ per ounce)	1,130		-	1,321	1,237
Lead ($ per pound)	0.86		-		0.86
Zinc ($ per pound)	0.62		-	-	0.62

¹Ying Mining District includes mines: SGX (Ying), TLP, HPG&LM.
²X Mines includes the XBG project and XHP project.

EX-99.2 3 exhibit99-2.htm FINANCIAL STATEMENTS FOR THE 2ND QUARTER ENDED SEPTEMBER 30, 2012 Exhibit 99.2

Exhibit 99.2

SILVERCORP METALS INC.

UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2012
(Expressed in thousands of US dollars, unless otherwise stated)

SILVERCORP METALS INC.

Unaudited Consolidated Balance Sheets

(Expressed in thousands of U.S. dollars)


	Notes		September 30, 2012		March 31, 2012
ASSETS
Current Assets
Cash and cash equivalents	21	$	89,334	$	109,960
Short-term investments			47,236		44,551
Accounts receivable			3,197		12,904
Inventories	3		7,665		7,006
Due from related parties	11		369		679
Prepaids and deposits			5,640		5,210
			153,441		180,310

Non-current Assets
Long term prepaids and deposits			5,786		6,015
Investment in an associate	4		16,534		15,872
Other investments	5		42,300		45,757
Plant and equipment	6		80,992		68,788
Mineral rights and properties	7		288,123		258,521
Deferred income tax assets			-		171
TOTAL ASSETS		$	587,176	$	575,434

LIABILITIES AND EQUITY
Current Liabilities
Accounts payable and accrued liabilities		$	26,738	$	23,590
Deposits received			7,255		7,268
Dividends payable			4,339		4,271
Income tax payable			3,141		5,082
			41,473		40,211

Non-current Liabilities
Deferred income tax liabilities			22,509		19,991
Environmental rehabilitation			4,467		4,400
Total Liabilities			68,449		64,602

Equity
Share capital			232,843		232,678
Contributed surplus			7,108		5,552
Reserves			24,717		24,717
Accumulated other comprehensive income	9		24,198		25,285
Retained earnings			152,715		145,580
Total equity attributable to the equity holders of the Company			441,581		433,812

Non-controlling interests	10		77,146		77,020
Total Equity			518,727		510,832

TOTAL LIABILITIES AND EQUITY		$	587,176	$	575,434
Commitments	20

Approved on behalf of the Board:

(Signed) David Kong
Director

(Signed) Rui Feng
Director

See accompanying notes to the unaudited consolidated financial statements

SILVERCORP METALS INC.

Unaudited Consolidated Statements of Income

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


			Three Months Ended September 30,						Six Months Ended September 30,
	Notes		2012			2011			2012			2011

Sales		$	45,209		$	62,055		$	89,758		$	131,774
Cost of sales	12		16,446			14,435			35,440			28,494
Gross profit			28,763			47,620			54,318			103,280

General and administrative	13		6,191			7,456			13,037			12,401
General exploration and property investigation			887			1,209			1,853			3,001
Other taxes	14		842			1,039			1,648			2,177
Foreign exchange loss (gain)			1,142			(1,284	)		365			(760	)
Loss on disposal of plant and equipment			5			171			25			253
Income from operations			19,696			39,029			37,390			86,208

Share of gain (loss) in an associate	4		(182	)		116			(189	)		92
Write down of inventories	3		(348	)		-			(348	)		-
Gain (loss) on investments			693			(670	)		(593	)		(1,829	)
Other income			93			126			168			301
Income before finance items and income taxes			19,952			38,601			36,428			84,772

Finance income	15		851			1,110			1,842			1,780
Finance costs	15		(23	)		(23	)		(45	)		(46	)
Income before income taxes			20,780			39,688			38,225			86,506

Income tax expense	16		7,277			13,786			15,204			26,360
Net income		$	13,503		$	25,902		$	23,021		$	60,146

Attributable to:
Equity holders of the Company		$	9,500		$	18,471		$	15,614		$	44,113
Non-controlling interests	10		4,003			7,431			7,407			16,033
		$	13,503		$	25,902		$	23,021		$	60,146

Earnings per share attributable to the equity holders of the Company
Basic earnings per share		$	0.06		$	0.11		$	0.09		$	0.25
Diluted earnings per share		$	0.06		$	0.11		$	0.09		$	0.25
Weighted Average Number of Shares Outstanding - Basic			170,719,933			173,664,959			170,706,702			174,343,192
Weighted Average Number of Shares Outstanding - Diluted			171,062,715			174,282,790			171,072,838			175,122,557

See accompanying notes to the unaudited consolidated financial statements

SILVERCORP METALS INC.

Unaudited Consolidated Statements of Comprehensive Income (Loss)

(Expressed in thousands of U.S. dollars)


		Three Months Ended September 30,					Six Months Ended September 30,
		2012		2011			2012			2011

Net income	$	13,503	$	25,902		$	23,021		$	60,146
Other comprehensive income (loss), net of taxes:
Unrealized gain (loss) on equity investments designated as FVTOCI, net of tax		405		(2,271	)		(3,374	)		(4,187	)
Currency translation adjustment, net of tax		8,587		(5,108	)		2,394			18
Other comprehensive income (loss), net of taxes		8,992		(7,379	)		(980	)		(4,169	)
Comprehensive income, net of taxes	$	22,495	$	18,523		$	22,041		$	55,977

Attributable to:
Equity holders of the Company	$	17,752	$	10,261		$	14,527		$	38,411
Non-controlling interests		4,743		8,262			7,514		$	17,566
	$	22,495	$	18,523		$	22,041		$	55,977

See accompanying notes to the unaudited consolidated financial statements

SILVERCORP METALS INC.

Unaudited Consolidated Statements of Cash Flow

(Expressed in thousands of U.S. dollars)


			Three Months Ended September 30,						Six Months Ended September 30,
	Notes		2012			2011			2012			2011
Cash provided by
Operating activities
Net income		$	13,503		$	25,902		$	23,021		$	60,146
Add (deduct) items not affecting cash:
Accretion of environmental rehabilitation			23			23			45			46
Depreciation, amortization and depletion			3,114			3,294			7,190			5,881
Share of loss (gain) in an associate			182			(116	)		189			(92	)
Write down of inventories			348			-			348			-
Deferred income tax expense			129			4,379			3,113			5,507
Loss (gain) on investments			(693	)		670			593			1,829
Loss on disposal of plant and equipment			5			171			25			253
Stock-based compensation			872			841			1,608			1,619
Changes in non-cash operating working capital	21		6,434			15			7,037			(6,075	)
Net cash provided by operating activities			23,917			35,179			43,169			69,114

Investing activities
Mineral rights and properties
Capital expenditures			(14,097	)		(7,326	)		(26,413	)		(13,701	)
Plant and equipment
Additions			(5,328	)		(6,018	)		(13,485	)		(10,150	)
Investments
Acquisition			(80	)		-			(595	)		(1,020	)
Net redemptions (purchases) of short-term investments			12,457			12,813			(2,355	)		7,820
Acquisition of Zhongxing/Chuanxin (net of cash acquired, $20)			-			(3,403	)		-			(3,403	)
Prepayments to acquire mineral property, plant and equipment			(2,629	)		(19,989	)		(4,100	)		(21,095	)
Net cash used in investing activities			(9,677	)		(23,923	)		(46,948	)		(41,549	)

Financing activities
Net repayment from (advance to) related parties			253			(11,113	)		310			(12,290	)
Non-controlling interests
Contribution			-			578			-			5,158
Distribution	10		(7,388	)		-			(7,388	)		-
Cash dividends distributed			(4,220	)		(3,705	)		(8,525	)		(7,305	)
Share capital
Proceeds from issuance of common shares			19			61			113			951
Normal course issuer bid			-			(35,380	)		-			(35,380	)
Net cash used in financing activities			(11,336	)		(49,559	)		(15,490	)		(48,866	)

Effect of exchange rate changes on cash and cash equivalents			2,775			(3,330	)		(1,357	)		(1,880	)

Increase (decrease) in cash and cash equivalents			5,679			(41,633	)		(20,626	)		(23,181	)

Cash and cash equivalents, beginning of the period			83,655			165,676			109,960			147,224

Cash and cash equivalents, end of the period		$	89,334		$	124,043		$	89,334		$	124,043

Supplementary cash flow information	21

See accompanying notes to the unaudited consolidated financial statements

SILVERCORP METALS INC.

Unaudited Consolidated Statements of Changes in Equity

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


		Share capital
													Accumulated other						Total equity attributable			Non-
		Number of						Contributed					comprehensive			Retained			to the equity holders of			controlling
	Notes	shares			Amount			surplus			Reserves		income (loss)			earnings			the Company			interests			Total equity
Balance, April 1, 2011		174,925,709		$	266,081		$	3,131		$	24,717	$	19,362		$	87,326		$	400,617		$	53,060		$	453,677
Options exercised		145,445			1,430			(479	)		-		-			-			951			-			951
Stock-based compensation		-			-			1,619			-		-			-			1,619			-			1,619
Normal course issuer bid		(4,468,012	)		(35,275	)		-			-		-			-			(35,275	)		-			(35,275	)
Transaction cost		-			(105	)		-			-		-			-			(105	)		-			(105	)
Unrealized loss on equity investments designated as FVTOCI, net of taxes		-			-			-			-		(4,187	)		-			(4,187	)		-			(4,187	)
Cash dividends		-			-			-			-		-			(7,119	)		(7,119	)		-			(7,119	)
Acquisition of ZX/CX		-			-			-			-		-			-			-			523			523
Contribution from non-controlling interests		-			-			-			-		-			-			-			5,158			5,158
Net income		-			-			-			-		-			44,113			44,113			16,033			60,146
Currency translation adjustment		-			-			-			-		(1,515	)		-			(1,515	)		1,533			18
Balance, September 30, 2011		170,603,142		$	232,131		$	4,271		$	24,717	$	13,660		$	124,320		$	399,099		$	76,307		$	475,406
Options exercised		78,832			547			(194	)		-		-			-			353			-			353
Stock-based compensation		-			-			1,475			-		-			-			1,475			-			1,475
Unrealized loss on equity investments designated as FVTOCI, net of taxes		-			-			-			-		3,588			-			3,588			-			3,588
Cash dividends		-			-			-			-		-			(8,465	)		(8,465	)		-			(8,465	)
Acquisition of ZX/CX		-			-			-			-		-			-			-			813			813
Acquisition of SX Gold		-			-			-			-		-			-			-			753			753
Contribution from non-controlling interests		-			-			-			-		-			-			-			361			361
Distribution to non-controlling interests		-			-			-			-		-			-			-			(13,804	)		(13,804	)
Net income		-			-			-			-		-			29,725			29,725			11,357			41,082
Currency translation adjustment		-			-			-			-		8,037			-			8,037			1,233			9,270
Balance, March 31, 2012		170,681,974		$	232,678		$	5,552		$	24,717	$	25,285		$	145,580		$	433,812		$	77,020		$	510,832
Options exercised		43,084			165			(52	)		-		-			-			113			-			113
Stock-based compensation		-			-			1,608			-		-			-			1,608			-			1,608
Unrealized loss on equity investments designated as FVTOCI, net of taxes		-			-			-			-		(3,374	)		-			(3,374	)		-			(3,374	)
Cash dividends	8(c)	-			-			-			-		-			(8,479	)		(8,479	)		-			(8,479	)
Distribution to non-controlling interests		-			-			-			-		-			-			-			(7,388	)		(7,388	)
Net income		-			-			-			-		-			15,614			15,614			7,407			23,021
Currency translation adjustment		-			-			-			-		2,287			-			2,287			107			2,394
Balance, September 30, 2012		170,725,058		$	232,843		$	7,108		$	24,717	$	24,198		$	152,715		$	441,581		$	77,146		$	518,727

See accompanying notes to the unaudited consolidated financial statements

SILVERCORP METALS INC.

Notes to Unaudited Consolidated Financial Statements

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


1.	CORPORATE INFORMATION

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. The Company’s producing mines are in China, with current exploration and development projects in China and Canada.

The Company is a publicly listed company incorporated in Canada with limited liability under the legislation of the Province of British Columbia. The Company’s shares are listed on the Toronto Stock Exchange and the New York Stock Exchange.

The head office, registered address and records office of the Company are located at 200 Granville Street, Suite 1378, Vancouver, British Columbia, Canada, V6C 1S4.

The consolidated financial statements of the Company as at and for the three and six months ended September 30, 2012 were authorized for issue in accordance with a resolution of the Board of Directors dated on November 9, 2012.

Operating results for the three and six months ended September 30, 2012 are not necessarily indicative of the results that may be expected for the year ending March 31, 2013.

Details of the Company’s significant subsidiaries are as follows:


			Proportion of ownership interest held
		Place of	September 30,	March 31,	Mineral
Name of subsidiaries	Principal activity	incorporation	2012	2012	properties
Silvercorp Metals China Inc.	Holding company	Canada	100%	100%
Silvercorp Metals (China) Inc.	Holding company	China	100%	N/A
0875786 B.C. LTD.	Mining	Canada	100%	100%	Silvertip
Fortune Mining Limited	Holding company	BVI (i)	100%	100%
Fortune Copper Limited	Holding company	BVI	100%	100%
Fortress Mining Inc.	Holding company	BVI	100%	100%
Fortune Gold Mining Limited	Holding company	BVI	100%	100%
Victor Resources Ltd.	Holding company	BVI	100%	100%
Yangtze Mining Ltd.	Holding company	BVI	100%	100%
Victor Mining Ltd.	Holding company	Barbados	100%	100%
Yangtze Mining (H.K.) Ltd.	Holding company	Hong Kong	100%	100%
Fortune Gold Mining (H.K.) Limited	Holding company	Hong Kong	100%	100%
Wonder Success Limited	Holding company	Hong Kong	100%	100%
Qinghai Found Mining Co. Ltd. ("Qinghai Found")	Mining	China	82%	82%	RZY
Henan Huawei Mining Co. Ltd. ("Henan Huawei")	Mining	China	80%	80%	HPG, LM
Henan Found Mining Co. Ltd. ("Henan Found")	Mining	China	77.5%	77.5%	Ying, TLP
Zhongxing Mining Co., Ltd. ("ZX")	Mining	China	69.75%	69.75%	XBG
Chuanxin Mining Co., Ltd. ("CX")	Mining	China	69.75%	69.75%
Songxian Gold Mining Co., Ltd. ("SX Gold")	Mining	China	77.50%	77.50%	XHP
Xinshao Yunxiang Mining Co., Ltd. ("Yunxiang")	Mining	China	70%	70%	BYP
Guangdong Found Mining Co. Ltd. (Guangdong Found")	Mining	China	95%	95%	GC
(i) British Virgin Island ("BVI")

Details of the Company’s associate are as follows:


			Proportion of ownership interest held
		Place of	September 30,	March 31,
Name of associate	Principal activity	incorporation	2012	2012
New Pacific Metals Corp. ("NUX")	Mining	Canada	16.0%	14.8%

SILVERCORP METALS INC.

Notes to Unaudited Consolidated Financial Statements

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


2.	SIGNIFICANT ACCOUNTING POLICIES

(a)Statement of Compliance

These unaudited consolidated financial statements have been prepared in accordance with International Accounting Standard 34 – Interim Financial Reporting (“IAS 34”) as issued by the International Accounting Standards Board (“IASB”). These unaudited interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended March 31, 2012. These unaudited interim financial statements follow the same significant accounting policies set out in note 2 to the audited consolidated financial statements for the year ended March 31, 2012, except for the changes in note 2(b) here.

(b)Change in Accounting Policy

In November 2009, the IASB introduced IFRS 9, Financial Instruments (“IFRS 9”), which is part of a project to replace IAS 39, Financial Instruments: Recognition and Measurement (“IAS 39”). IFRS 9 replaces the current multiple classification and measurement model for financial assets and liabilities with a single model that has only two classification categories: amortized cost and fair value. Classification depends on the Company’s business model for managing its financial instruments and the contractual cash flow characteristics of the financial instruments. Adoption of IFRS 9 is required for annual periods beginning on or after January 1, 2015, with early adoption permitted. The Company has elected to early adopt IFRS 9 and the related consequential amendments effective April 1, 2012, which was the date of initial application (“DOIA”). The Company retrospectively applied IFRS 9 to comparative periods’ financial statements.

The adoption of this new standard has had a material impact on the classification of the Company’s financial instruments compared to the old standard under IAS 39. There were no quantitative changes as a result of adopting IFRS 9.

Upon the initial adoption of IFRS 9, the following changes in classification of the Company’s financial instruments were applied:


Financial Assets:	IAS 39	IFRS 9
Cash and cash equivalents	FVTPL	FVTPL
Accounts receivable	Loans and receivables	Amortized cost
Due from related parties	Loans and receivables	Amortized cost
Short term investments	Available-for-sale	Amortized cost
Equity investments	Available-for-sale	FVTOCI
Warrants	FVTPL	FVTPL

Financial Liabilities:	IAS 39	IFRS 9
Accounts payable and accrued liabilities	Other liabilities	Amortized cost
Dividends payable	Other liabilities	Amortized cost
Due to related parties	Other liabilities	Amortized cost

SILVERCORP METALS INC.

Notes to Unaudited Consolidated Financial Statements

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

The Company’s accounting policies for financial instruments under IFRS 9 are as follow:

The Company applies IFRS 9 to the recognition and measurement of financial assets and liabilities.

Initial recognition:
On initial recognition, all financial assets and financial liabilities are recorded at fair value adjusted for directly attributable transaction costs except for financial assets and liabilities classified as fair value through profit or loss (“FVTPL”), of which transaction costs are expensed as incurred.

Subsequent measurement of financial assets:
Subsequent measurement of financial assets depends on the classification of such assets.

	I.	Non-equity instruments:
		IFRS 9 includes a single model that has only two classification categories for financial instruments other than equity instruments: amortized cost and fair value. To qualify for amortized cost accounting, the instrument must meet two criteria:

	i.	The objective of the business model is to hold the financial asset for the collection of the cash flows; and
	ii.	All contractual cash flows represent only principal and interest on that principal.

All other instruments are mandatorily measured at fair value.

	II.	Equity instruments:
		At initial recognition, for equity instruments other than held for trading, the Company may make an irrevocable election to designate it as either FVTPL or fair value through other comprehensive income (“FVTOCI”).

Financial assets classified as amortized cost are measured using the effective interest method. Amortized cost is calculated by taking into account any discount or premiums on acquisition and fees that are an integral part of the effective interest method. Amortization from the effective interest method is included in finance income.

Financial assets classified as FVTPL are measured at fair value with changes in fair values recognized in profit or loss. Equity investments designated as FVTOCI are measured at fair value with changes in fair values recognized in other comprehensive income (“OCI”). Dividends from that investment are recorded in profit or loss when the Company's right to receive payment of the dividend is established unless they represent a recovery of part of the cost of the investment.

Impairment of financial assets carried at amortized cost:
The Company assesses at the end of each reporting period whether there is objective evidence that financial assets or group of financial assets measured at amortized cost are impaired. Impairment losses and reversal of impairment losses, if any, are recognized in profit or loss in the period they are incurred.

Subsequent measurement of financial liabilities:
Financial liabilities classified as amortized cost are measured using the effective interest method. Amortized cost is calculated by taking into account any discount or premiums on acquisition and fees that are an integral part of the effective interest method. Amortization using the effective interest method is included in finance costs.

SILVERCORP METALS INC.

Notes to Unaudited Consolidated Financial Statements

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

Financial liabilities classified as FVTPL are measured at fair value with gains and losses recognized in profit or loss.

The Company classifies its financial instruments as follows:

-	Financial assets classified as FVTPL: cash and cash equivalents and warrants;
-	Financial assets classified as FVTOCI: equity investments designated as FVTOCI;
-	Financial assets classified as amortized cost: short-term investments, accounts receivable and due from related parties;
-	Financial liabilities classified as amortized cost: accounts payable and accrued liabilities and dividends payable.

Derecognition of financial assets and financial liabilities:
A financial asset is derecognized when:

The rights to receive cash flows from the asset have expired; or

The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass- through’ arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

Gains and losses on derecognition of financial assets and liabilities classified as amortized cost are recognized in profit or loss when the instrument is derecognized or impaired, as well as through the amortization process.

Gains and losses on derecognition of equity investments designated as FVTOCI (including any related foreign exchange component) are recognized in OCI. Amounts presented in OCI are not subsequently transferred to profit or loss, although the cumulative gain or loss may be transferred within equity.

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability. In this case, a new liability is recognized, and the difference in the respective carrying amounts is recognized in the statement of income.

Offsetting of financial instruments:
Financial assets and liabilities are offset and the net amount is reported in the consolidated balance sheet if and only if, there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle liabilities simultaneously.

Fair value of financial instruments:
The fair value of financial instruments that are traded in active markets at each reporting date is determined by reference to quoted market prices, without deduction for transaction costs. For financial instruments that are not traded in active markets, the fair value is determined using appropriate valuation techniques, such as using a recent arm’s length market transaction between knowledgeable and willing parties, discounted cash flow analysis, reference to the current fair value of another instrument that is substantially the same, or other valuation models.

SILVERCORP METALS INC.

Notes to Unaudited Consolidated Financial Statements

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

(c) Accounting standards issued but not yet effective

IAS 1 – Presentation of Financial Statements amendment issued by the IASB in June 2011 provides improved consistency and clarity of the presentation of items of other comprehensive income. The main change was a requirement to group items presented in other comprehensive income on the basis of whether they are potentially reclassifiable to profit or loss subsequently. This amendment is effective for annual periods beginning on or after July 1, 2012, with earlier application permitted. The Company does not anticipate this amendment to have a significant impact on the consolidated financial statements.

IFRS 10 – Consolidated Financial Statements supersedes SIC 12 – Consolidation – Special Purpose Entities and the requirements relating to consolidated financial statements in IAS 27 – Consolidated and Separate Financial Statements. IFRS 10 establishes the principle and application of control as the basis for an investor to identify whether an investor controls an investee and thereby requiring consolidation. This standard is effective for annual periods beginning on or after January 1, 2013, with earlier application permitted.

IFRS 12 – Disclosure of Interests in Other Entities requires the disclosure of information that enables users of financial statements to evaluate the nature of, and risks associated with, its interests in other entities and the effects of those interests on its financial position, financial performance and cash flows. This standard is effective for annual periods beginning on or after January 1, 2013, with earlier application permitted.

The Company is still in the process of assessing the impact of the application of IFRS 10 and IFRS 12 on the consolidated financial statements.

IFRS 11 – Joint Arrangements establishes the principle a joint arrangement are classified as joint operations or joint ventures based on the rights and obligations of the parties to the joint arrangement, rather than its legal form. This standard is effective for annual periods beginning on or after January 1, 2013, with earlier application permitted.

IAS 28 – Investments in Associates and Joint Ventures prescribes the accounting for investments in associates and sets out the requirements for the application of the equity method for investments in associates and joint ventures. This standard is effective for annual periods beginning on or after January 1, 2013, with earlier application permitted.

The Company is still in the process of assessing the impact of the application of IFRS 11 and IAS 28 on the consolidated financial statements.


3.	INVENTORIES

Inventories consist of the following:


		September 30, 2012		March 31, 2012
Direct smelting ore and stockpile ore	$	3,022	$	2,743
Concentrate inventory		1,385		1,233
Total stockpile and concentrate		4,407		3,976
Material and supplies		3,258		3,030
	$	7,665	$	7,006

SILVERCORP METALS INC.

Notes to Unaudited Consolidated Financial Statements

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

The amounts of inventory recognized as expenses during the three and six months ended September 30, 2012 and 2011 were equivalent to the cost of sales.

For the three and six months ended September 30, 2012, stockpile and concentrate inventory in the amount of $348 and $348, respectively, (for three and six months ended September 30, 2011, $nil and $nil, respectively) were written down to its net realizable value.


4.	INVESTMENT IN AN ASSOCIATE

New Pacific Metals Corp. (“NUX”) is a Canadian public company listed on the TSX (symbol: NUX). NUX is a related party of the Company by way of two common directors and officers.

As at September 30, 2012, the Company owned 10,806,300 common shares (March 31, 2012 - 9,956,300) of NUX, representing an ownership interest of 16.0% (March 31, 2012 – 14.8%).

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


						Value of NUX's
	Number of					common shares per
	shares		Amount			quoted market price
Balance, April 1, 2011	9,402,100	$	15,822		$	19,640
Acquisition from market	554,200		662
Share of loss			(182	)
Foreign exchange impact			(430	)
Balance, March 31, 2012	9,956,300	$	15,872		$	9,367
Acquisition from market	850,000		595
Share of loss			(189	)
Foreign exchange impact			256
Balance, September 30, 2012	10,806,300	$	16,534		$	7,031


5.	OTHER INVESTMENTS


			September 30, 2012		March 31, 2011

Equity investments designated as FVTOCI

Publicly-traded companies	(a)	$	8,636	$	11,890

Yongning Smelting Co. Ltd.	(b)		9,546		9,525

Jinduicheng Xise (Canada) Co. Ltd.	(c)		22,395		22,050

Warrants	(a)		1,723		2,292
		$	42,300	$	45,757

SILVERCORP METALS INC.

Notes to Unaudited Consolidated Financial Statements

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

(a) Investments in publicly-traded companies with no significant influence

Investments in publicly-traded companies represent equity interests of other publicly-trading mining companies that the Company has acquired through the open market or through private placements. These equity interests are for long-term investment purposes and consist of common shares and warrants. Common shares are designated as FVTOCI and are measured at fair value on initial recognition and subsequent measurement. As of September 30, 2012, none of the shares held by the Company was over 10% of the respective outstanding shares of investees.

Warrants, by their nature, meet the definition of derivatives and are classified as FVTPL. The fair value of the warrants was determined using the Black-Scholes pricing model as at the acquisition date as well as at each period end. For the three and six months ended September 30, 2012, fair value changes in the amount of $693 and $(593), respectively, are recorded in gain (loss) on investments (for the three and six months ended September 30, 2011 – loss of $670 and $1,829, respectively).

Common shares:


				Accumulated mark-to-
				market gains included in
		Fair value		OCI
March 31, 2012	$	11,890	$	4,151
September 30, 2012	$	8,636	$	777

Warrants:


				Accumulated mark-to-market
		Fair value		gains (loss) included in net income
March 31, 2012	$	2,292	$	716
September 30, 2012	$	1,723	$	123

(b) Luoyang Yongning Smelting Co. Ltd. (“Yongning Smelting”)

Yongning Smelting is a private company based in China. The Company invested in Yongning Smelting through its subsidiary Henan Found. As at September 30, 2012, the Company’s total investment in Yongning Smelting is $9,546 (RMB 60 million) (March 31, 2012 - $9,525, RMB 60 million), representing 15% (March 31, 2012 - 15%) of Yongning Smelting’s equity interest. The investment in Yongning is for long-term investment purpose and consists of common shares of Yongning.

(c) Jinduicheng Xise (Canada) Co. Ltd. (“Jinduicheng”)

Jinduicheng is a private mining company based in Canada. The Company invested in Jinduicheng through a private placement. As at September 30, 2012, the Company’s total investment in Jinduicheng is $22,395 (CAD$22 million) (March 31, 2012 - $22,050, CAD$22 million), representing 6% (March 31, 2012 - 6%) of Jinduicheng’s total equity interest. The investment in Jinduicheng is for long-term investment purpose and consists of common shares of Jinduicheng.

SILVERCORP METALS INC.

Notes to Unaudited Consolidated Financial Statements

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


6.	PLANT AND EQUIPMENT

Plant and equipment consist of:


		Land and			Office						Motor			Construction
Cost		building			equipment			Machinery			vehicle			in progress			Total
Balance as at March 31, 2012	$	47,250		$	3,051		$	18,167		$	5,570		$	6,580		$	80,618
Additions		1,887			626			1,614			307			10,332			14,766
Disposals		(1	)		(1	)		(6	)		(132	)		-			(140	)
Reclassify from construction in progress		264			-			-			129			(393	)		-
Impact of foreign currency translation		152			29			58			17			107			363
Ending balance as at September 30, 2012	$	49,552		$	3,705		$	19,833		$	5,891		$	16,626		$	95,607

Accumulated depreciation and amortization
Balance as at March 31, 2012	$	(4,370	)	$	(1,355	)	$	(4,193	)	$	(1,912	)	$	-		$	(11,830	)
Disposals		-			-			4			111			-			115
Depreciation and amortization		(1,029	)		(289	)		(1,033	)		(481	)		-			(2,832	)
Impact of foreign currency translation		(24	)		(15	)		(20	)		(9	)		-			(68	)
Ending balance as at Septmber 30, 2012	$	(5,423	)	$	(1,659	)	$	(5,242	)	$	(2,291	)	$	-		$	(14,615	)

Carrying amounts
Balance as at March 31, 2012	$	42,880		$	1,696		$	13,974		$	3,658		$	6,580		$	68,788
Balance as at September 30, 2012	$	44,129		$	2,046		$	14,591		$	3,600		$	16,626		$	80,992

During the three and six months ended September 30, 2012, certain plant and equipment were disposed of with proceeds of $nil (for the three and six months ended September 30, 2011 - $nil) and loss of $5 and $25, respectively (for the three and six months ended September 30, 2011 - $171 and $253, respectively).


7.	MINERAL RIGHTS AND PROPERTIES

Mineral rights and properties consist of:


Cost		Ying			TLP			HPG			LM			BYP			GC		XBG		XHP			RZY		Silvertip		Total
Balance as at March 31, 2012	$	66,019		$	14,043		$	6,653		$	11,374		$	55,858		$	76,980	$	12,334	$	13,564		$	-	$	27,137	$	283,962
Capitalized expenditures		9,310			2,863			1,718			5,072			2,557			6,213		629		3,266			757		1,248		33,633
Mining exploration tax credit		-			-			-			-			-			-		-		-			-		-		-
Environmental rehabiliation		-			-			-			-			-			-		-		-			-		-		-
Foreign currecy translation impact		242			57			30			72			147			230		32		60			7		449		1,326
Ending balance as at September 30, 2012	$	75,571		$	16,963		$	8,401		$	16,518		$	58,562		$	83,423	$	12,995	$	16,890		$	764	$	28,834	$	318,921

Accumulated depletion
Balance as at March 31, 2012	$	(18,531	)	$	(1,142	)	$	(1,536	)	$	(2,102	)	$	(2,064	)	$	-	$	-	$	(66	)	$	-	$	-	$	(25,441	)
Depletion		(2,504	)		(333	)		(339	)		(334	)		(1,649	)		-		-		(92	)		-		-		(5,251	)
Foreign currecy translation impact		(64	)		(6	)		(7	)		(8	)		(20	)		-		-		(1	)		-		-		(106	)
Ending balance as at September 30, 2012	$	(21,099	)	$	(1,481	)	$	(1,882	)	$	(2,444	)	$	(3,733	)	$	-	$	-	$	(159	)	$	-	$	-	$	(30,798	)

Carrying amounts
Balance as at March 31, 2012	$	47,488		$	12,901		$	5,117		$	9,272		$	53,794		$	76,980	$	12,334	$	13,498		$	-	$	27,137	$	258,521
Balance as at September 30, 2012	$	54,472		$	15,482		$	6,519		$	14,074		$	54,829		$	83,423	$	12,995	$	16,731		$	764	$	28,834	$	288,123

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

During the three months ended September 30, 2012, the Company commenced its first diamond drilling program at Ran Zhe Yong (“RZY”) Project in Qinghai Province, China. RZY exploration permit is currently owned by Qinghai Geological Survey Bureau, the non-controlling interest holder of Qinghai Found, which is an 82% owned-subsidiary of the Company. Pursuant to the joint-exploration agreement, Qinghai Found

SILVERCORP METALS INC.

Notes to Unaudited Consolidated Financial Statements

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

has 67% of mineral interest of the RZY Project, and is able to earn up to 82% of it by providing $4.8 million (RMB 30 million) exploration funding, and by which time, the exploration permit will be transferred to Qinghai Found. The Company plans to fund up to $32 million (RMB 200 million) in exploration and capital expenditures for the RZY project. For three and six months ended September 2012, five diamond drilling holes, with a total of 833 meters were completed. Exploration expenditures in the amount of $757 were spent.


8.	SHARE CAPITAL

(a) Authorized

Unlimited number of common shares without par value. All shares issued as at September 30, 2012 were fully paid.

(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, 2012	3,834,253		$	7.23
Options granted	723,000			5.86
Options exercised	(43,084	)		2.65
Options forfeited	(90,000	)		8.73
Options expired	(373,500	)		6.74
Balance, September 30, 2012	4,050,669		$	7.05

During the six months ended September 30, 2012, a total of 723,000 options with a life of five years were granted to directors, officers, and employees at an exercise price of CAD$5.35 - CAD$6.53 per share subject to a vesting schedule over a four-year term with 6.25% options vesting every three months from the date of grant.

SILVERCORP METALS INC.

Notes to Unaudited Consolidated Financial Statements

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

The fair value of stock options granted during the six months ended September 30, 2012 and 2011 were calculated as of the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions:


		Six months ended September 30,
		2012		2011
Risk free interest rate		1.16%		2.06%
Expected life of option in years		3.12 years		3.12 years
Expected volatility		63%		67%
Expected dividend yield		1.7%		1%
Estimated forfeiture rate		10%		10%
Weighted average share price	$	5.86	$	11.70

The weighted average grant date fair value of options granted during the six months ended September 30, 2012 was CAD$2.28 (six months ended September 30, 2011 - CAD$5.21). Volatility was determined based on the historical volatility over the estimated life of options. For the three and six months ended September 30, 2012, a total of $872 and $1,608, respectively (three and six months ended September 30, 2011 - $841 and $1,619, respectively) in stock-based compensation expenses was recorded and included in the general and administrative expenses on the consolidated statements of income.

The following table summarizes information about stock options outstanding at September 30, 2012:


	Exercise price in CAD$	Number of options outstanding at September 30, 2012	Weighted average remaining contractual life (Years)		Weighted average exercise price in CAD$	Number of options exercisable at September 30, 2012		Weighted average exercise price in CAD$
$	6.95	15,000	0.00	$	6.95	15,000	$	6.95
	9.05	13,700	0.30		9.05	13,700		9.05
	7.54	25,000	0.62		7.54	25,000		7.54
	5.99	202,500	0.75		5.99	202,500		5.99
	3.05	60,000	1.00		3.05	60,000		3.05
	2.65	573,001	1.55		2.65	573,001		2.65
	7.00	385,500	2.26		7.00	319,168		7.00
	7.40	193,250	2.55		7.40	142,751		7.40
	8.23	366,437	3.01		8.23	156,627		8.23
	12.16	223,781	3.26		12.16	83,781		12.16
	14.96	208,500	3.52		14.96	65,163		14.96
	9.20	280,000	3.68		9.20	70,000		9.20
	7.27	321,000	4.15		7.27	60,193		7.27
	6.69	466,000	4.43		6.69	58,253		6.69
	6.53	307,000	4.71		6.53	19,196		6.53
	5.35	410,000	4.85		5.35	-		-
$	2.65-14.96	4,050,669	3.19	$	7.05	1,864,333	$	6.17

(c) Cash dividends declared and distributed

During the three and six months ended September 30, 2012, dividends of $4,255 and $8,479, respectively (three and six months ended September 30, 2011 - $3,500 and $7,119, respectively) were declared.

SILVERCORP METALS INC.

Notes to Unaudited Consolidated Financial Statements

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

9.	ACCUMULATED OTHER COMPREHENSIVE INCOME


		September 30, 2012		March 31, 2012
Unrealized gain on equity investments designated as FVTOCI	$	777	$	4,151
Currency translation adjustment		23,421		21,134
Balance, end of the year	$	24,198	$	25,285

The unrealized gain on equity investments designated as FVTOCI and on currency translation adjustment are net of tax nil for all periods presented.

10.

NON-CONTROLLING INTERESTS

The continuity of non-controlling interests is summarized as follows:


								Henan			Qinghai						Guangdong
		Henan Found			ZX/CX			Huawei			Found			Yunxiang			Found			SX Gold			Total
Balance, March 31, 2011	$	39,430		$	-		$	1,364		$	(11	)	$	11,174		$	1,103		$	-		$	53,060
Share of net income (loss)		25,247			66			2,321			(84	)		137			(19	)		(278	)		27,390
Share of other comprehensive income		1,821			62			97			12			559			189			26			2,766
Acquisition of Zhongxing/Chuanxin		(2,706	)		4,042			-			-			-			-			-			1,336
Acquisition of SX Gold		(5,150	)		-			-			-			-			-			5,903			753
Contribution		-			940			-			-			3,655			924			-			5,519
Distribution		(13,804	)		-			-			-			-			-			-			(13,804	)
Balance, March 31, 2012	$	44,838		$	5,110		$	3,782		$	(83	)	$	15,525		$	2,197		$	5,651		$	77,020
Share of net income (loss)		6,638			(73	)		1,154			(33	)		(19	)		(1	)		(259	)		7,407
Share of other comprehensive income (loss)		61			10			17			(16	)		32			(5	)		8			107
Distribution		(7,073	)		-			(315	)		-			-			-			-			(7,388	)
Balance, September 30, 2012	$	44,464		$	5,047		$	4,638		$	(132	)	$	15,538		$	2,191		$	5,400		$	77,146

As at September 30, 2012, non-controlling interests in Henan Found, ZX, CX, Henan Huawei, Qinghai Found, Yunxiang, Guangdong Found and SX Gold were 22.5%, 30.25%, 30.25%, 20%, 18%, 30%, 5% and 22.5%, respectively.

11.

RELATED PARTY TRANSACTIONS

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


Due from related parties		September 30, 2012		March 31, 2012
NUX (a)	$	70	$	95
Henan Non-ferrous Geology Bureau (b)		17		17
Z.X. Zhu (e)		282		567
	$	369	$	679

(a)

According to a services and administrative costs reallocation agreement between the Company and NUX, the Company recovers costs for services rendered to NUX and expenses incurred on behalf of NUX. During the three and six months ended September 30, 2012, the Company recovered $143 and $269, respectively (for the three and six months ended September 30, 2011 - $302 and $379, respectively) 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 income.

SILVERCORP METALS INC.

Notes to Unaudited Consolidated Financial Statements

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

(b)	Henan Non-ferrous Geology Bureau (“Henan Geology Bureau”) is a 22.5% equity interest holder of Henan Found. During the three and six months ended September 30, 2012, Henan Found paid dividends of $7,073 (for the three and six months ended September 30, 2011 - $nil) to Henan Geology Bureau.

(c)	For the three and six months ended September 30, 2012, the Company paid $101 and $194, respectively (for the three and six months ended September 30, 2011 - $57 and $154, respectively) to McBrighton Consulting Ltd., a private company controlled by a director of the Company for consulting services. These amounts are included in salaries for key management personnel in note 11 (h).

(d)	For the three and six months ended September 30, 2012, the Company paid $152 and $300, respectively (for the three and six months ended September 30, 2011 - $128 and $171, respectively) to R. Feng Consulting Ltd., a private company controlled by a director of the Company for consulting services. These amounts are included in salaries for key management personnel in note 11 (h).

(e)	Z.X. Zhu is the 30% non-controlling interest shareholder of Yunxiang.

(f)	The Company rents an office space (6,700 square feet) in Beijing from a relative of a director and officer of the Company for $12 (RMB 74,712) per month. During the three and six months ended September 30, 2012, total rents were $36 and $72, respectively (for the three and six months ended September 30, 2011 - $36 and $72, respectively).

(g)	Henan Xinhui Mining Co., Ltd. (“Henan Xinhui”) is a 20% equity interest holder of Henan Huawei. During the three and six months ended September 30, 2012, Henan Huawei paid dividends of $315 (for the three and six months ended September 30, 2011 - $nil) to Henan Xinhui.

The balances with related parties are unsecured, non-interest bearing, and due on demand.

(h)	Compensation of key management personnel

The remuneration of directors and other members of key management personnel for the three and six months ended September 30, 2012 and 2011 were as follows:


		Three months ended September 30,				Six months ended September 30,
		2012		2011		2012		2011
Directors' fees	$	61	$	128	$	120	$	174
Salaries for key management personnel		879		1,140		1,289		1,505
Stock-based compensation		571		836		1,132		2,011
	$	1,511	$	2,104	$	2,541	$	3,690

Salaries of key management personnel include consulting and management fees disclosed in note 11 (c) & (d). Stock-based compensation expenses were measured at grant date fair value.

SILVERCORP METALS INC.

Notes to Unaudited Consolidated Financial Statements

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

12.

COST OF SALES

Cost of sales consists of:


		Three months ended September 30,				Six months ended September 30,
		2012		2011		2012		2011
Direct mining and milling cost	$	13,665	$	11,393	$	28,995	$	23,074
Depreciation, amortization and depletion		2,781		3,042		6,445		5,420
Cost of sales	$	16,446	$	14,435	$	35,440	$	28,494

13.

GENERAL AND ADMINISTRATIVE

General and administrative expenses consist of:


		Three months ended September 30,				Six months ended September 30,
General and administrative		2012		2011		2012		2011
Office and administrative expenses	$	2,145	$	3,042	$	5,095	$	5,107
Amortization and depreciation		333		251		745		460
Salaries and benefits		2,187		1,974		4,299		3,814
Stock based compensation		872		841		1,608		1,619
Professional fees		654		1,348		1,290		1,401
	$	6,191	$	7,456	$	13,037	$	12,401

14.

OTHER TAXES

Other taxes were composed of surtax on value-added tax, land usage levy, stamp duty and other miscellaneous levies, duties and taxes imposed by the state and local Chinese government.

15.

FINANCE ITEMS

Finance items consist of:


		Three months ended September 30,				Six months ended September 30,
Finance income		2012		2011		2012		2011
Interest income	$	851	$	1,110	$	1,842	$	1,780


		Three months ended September 30,				Six months ended September 30,
Finance costs		2012		2011		2012		2011
Accretion of environmental rehabilitation provision	$	23	$	23	$	45	$	46

16.

INCOME TAX

Income tax expense consists of:


		Three months ended September 30,				Six months ended September 30,
Income tax expense		2012		2011		2012		2011
Current	$	7,148	$	9,407	$	12,091	$	20,853
Deferred		129		4,379		3,113		5,507
	$	7,277	$	13,786	$	15,204	$	26,360

SILVERCORP METALS INC.

Notes to Unaudited Consolidated Financial Statements

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

17.

CAPITAL DISCLOSURES

The Company’s objectives of capital management are intended to safeguard the entity’s ability to support the Company’s normal operating requirement on an ongoing basis, continue the development and exploration of its mineral properties, and support 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.

18.

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.

(a)Fair value

The Company classifies its fair value measurements within a fair value hierarchy, which reflects the significance of the inputs used in making the measurements as defined in IFRS 7, Financial Instruments: Disclosures (“IFRS 7”).

Level 1 – Unadjusted quoted prices at the measurement date for identical assets or liabilities in active markets.

Level 2 – Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3 – Unobservable inputs which are supported by little or no market activity.

SILVERCORP METALS INC.

Notes to Unaudited Consolidated Financial Statements

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

The following table sets forth the Company’s financial assets that are measured at fair value on a recurring basis by level within the fair value hierarchy. As required by IFRS 7, assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. As of September 30, 2012 and March 31, 2012, the Company did not have financial liabilities measured at fair value on a recurring basis.


		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	89,334	$	-	$	-	$	89,334
Common shares of publicly traded companies		8,636		-		-		8,636
Yongning Smelting Co. Ltd.		-		-		9,546		9,546
Jinduicheng Xise (Canada) Co. Ltd.		-		-		22,395		22,395
Warrants		-		-		1,723		1,723

Fair value of the other financial instruments excluded from the table above approximates to their carrying amount as of September 30, 2012 and March 31, 2012, respectively.

(b)Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its short term business requirements. The Company has in place a planning and budgeting process to help determine the funds required to support the Company’s normal operating requirements on an ongoing basis and its expansion plans.

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.


		September 30, 2012		March 31, 2012
	Within a year
Accounts payable and accrued liabilities	$	26,738	$	23,590
Dividends payable		4,339		4,271
	$	31,077	$	27,861

(c) Foreign exchange risk

The Company undertakes transactions denominated in foreign currencies and is exposed to foreign exchange risk arising from such transactions.

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 USD 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.

SILVERCORP METALS INC.

Notes to Unaudited Consolidated Financial Statements

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

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:


		September 30, 2012		March 31, 2012
Financial assets denominated in U.S. Dollars	$	16,494	$	18,510
Financial assets denominated in Chinese RMB	$	116,196	$	33,542

As at September 30, 2012, with other variables unchanged, a 1% strengthening (weakening) of the RMB against the USD would have increased (decreased) net income by approximately $0.3 million.

As at September 30, 2012, with other variables unchanged, a 1% strengthening (weakening) of the CAD against the USD would have decreased (increased) net income by approximately $0.2 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 interest at market rates that are fixed to maturity or at variable interest rates. Due to 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 September 30, 2012.

(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, due from related parties, 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 trade receivables from its major customers primarily in China engaged in the mining and milling of base and polymetallic metals. The historical level of customer defaults is zero and aging of trade receivables are no more than 180 days, and, as a result, the credit risk associated with trade receivables from customers as at September 30, 2012 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. As the Company’s marketable securities holding are mainly in mining companies, the value will also fluctuate based on commodity prices. Based upon the Company’s portfolio at September 30, 2012, a 10% increase (decrease) in the market price of the securities held, ignoring any foreign currency effects would have resulted in an increase (decrease) to comprehensive income of approximately $1 million.

SILVERCORP METALS INC.

Notes to Unaudited Consolidated Financial Statements

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

19.

SEGMENTED INFORMATION

Operating segments are components of the Company whose separate financial information is available and that is evaluated regularly by the Company’s Chief Executive Officer who is the Chief Operating Decision Maker. The format for segment reporting is based on major project segments segregated by significant geographic locations. The project segments are determined based on the Company’s management and internal reporting structure as follows:


Operational Segments	Subsidiaries Included in the Segment	Properties Included in the Segment
China
Henan Luoning	Henan Found and Henan Huawei	Ying, TLP, HPG and LM
ZX/CX	Zhongxing and Chuanxin	XBG
SX Gold	SX Gold	XHP
Hunan	Yunxiang	BYP
Guangdong	Guangdong Found	GC
Other	Qinghai Found, Silvercorp Metals (China) Inc.	RZY
Canada
Silvertip	0875786 B.C. Ltd.	Silvertip
Head Office	Silvercorp Metals Inc.	N/A
Other Regions	BVI and Barbados' holding companies	N/A

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


September 30, 2012
		China											Canada
Balance sheet items:		Henan Luoning		ZX/CX		SX Gold		Hunan		Guangdong		Other		Silvertip		Head Office		Other Regions		Total

Plant and equipment	$	38,240	$	4,524	$	8,066	$	4,158	$	21,841	$	1,736	$	1,709	$	718	$	-	$	80,992
Mineral rights and properties		90,547		12,995		16,731		54,829		83,423		764		28,834		-		-		288,123
Investment in an associate		-		-		-		-		-		-		-		15,251		1,283		16,534
Other investments		9,546		-		-		-		-		-		-		31,267		1,487		42,300

March 31, 2012
		China											Canada
Balance sheet items:		Henan Luoning		ZX/CX		SX Gold		Hunan		Guangdong		Other		Silvertip		Head Office		Other Regions		Total

Plant and equipment	$	37,631	$	4,646	$	7,603	$	3,488	$	11,223	$	1,746	$	1,779	$	662	$	-	$	68,778
Mineral rights and properties		74,778		12,334		13,498		53,794		76,980		-		27,137		-		-		258,521
Investment in an associate		-		-		-		-		-		-		-		15,206		666		15,872
Other investments		9,525		-		-		-		-		-		-		34,346		1,886		45,757

SILVERCORP METALS INC.

Notes to Unaudited Consolidated Financial Statements

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

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


Three months ended September 30, 2012
	China																	Canada
		Henan																							Other			Total
Statement of operations:		Luoning			ZX/CX			SX Gold			Hunan			Guangdong		Other			Silvertip		Head Office				Regions
Sales	$	43,730		$	-		$	-		$	1,479		$	-	$	-		$	-		$	-		$	-		$	45,209
Cost of sales		(15,514	)		-			-			(932	)		-		-			-			-			-			(16,446	)
Gross profit		28,216			-			-			547			-		-			-			-			-			28,763

Operating expenses		(2,949	)		(117	)		(308	)		(465	)		6		(1,095	)		(26	)		(3,734	)		(379	)		(9,067	)
Other income (loss)		60			-			1			(347	)		-		-			-			541			1			256
Finance items		872			17			(209	)		1			7		53			-			9			78			828
Income tax recovery (expenses)		(6,863	)		-			-			67			-		(1	)		-			-			(480	)		(7,277	)
Net income	$	19,336		$	(100	)	$	(516	)	$	(197	)	$	13	$	(1,043	)	$	(26	)	$	(3,184	)	$	(780	)	$	13,503

Attributed to:
Equity holders of the Company		15,107			(69	)		(400	)		(139	)		12		(1,021	)		(26	)		(3,184	)		(780	)		9,500
Non-controlling interests		4,229			(31	)		(116	)		(58	)		1		(22	)		-			-			-			4,003
Net income	$	19,336		$	(100	)	$	(516	)	$	(197	)	$	13	$	(1,043	)	$	(26	)	$	(3,184	)	$	(780	)	$	13,503


Three months ended September 30, 2011
	China																Canada
		Henan																						Other			Total
Statement of operations:		Luoning			ZX/CX		SX Gold		Hunan			Guangdong			Other			Silvertip		Head Office				Regions
Sales	$	59,835		$	-	$	-	$	2,220		$	-		$	-		$	-		$	-		$	-		$	62,055
Cost of sales		(13,469	)		-		-		(966	)		-			-			-			-			-			(14,435	)
Gross profit		46,366			-		-		1,254			-			-			-			-			-			47,620

Operating expenses		(4,513	)		-		-		(547	)		(579	)		26			(23	)		(4,109	)		1,154			(8,591	)
Other income		76			-		-		12			(1	)		-			-			(471	)		(44	)		(428	)
Finance items		914			-		-		(7	)		38			1			-			133			8			1,087
Income tax expenses		(10,336	)		-		-		150			-			-			-			-			(3,600	)		(13,786	)
Net income	$	32,507		$	-	$	-	$	862		$	(542	)	$	27		$	(23	)	$	(4,447	)	$	(2,482	)	$	25,902

Attributed to:
Equity holders of the Company		25,283			-		-		603			(515	)		52			(23	)		(4,447	)		(2,482	)		18,471
Non-controlling interests		7,224			-		-		259			(27	)		(25	)		-			-			-			7,431
Net income	$	32,507		$	-	$	-	$	862		$	(542	)	$	27		$	(23	)	$	(4,447	)	$	(2,482	)	$	25,902

SILVERCORP METALS INC.

Notes to Unaudited Consolidated Financial Statements

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


Six months ended September 30, 2012
	China																		Canada
		Henan																								Other			Total
Statement of operations:		Luoning			ZX/CX			SX Gold			Hunan			Guangdong			Other			Silvertip		Head Office				Regions
Sales	$	86,026		$	-		$	-		$	3,732		$	-		$	-		$	-		$	-		$	-		$	89,758
Cost of sales		(32,704	)		-			-			(2,736	)		-			-			-			-			-			(35,440	)
Gross profit		53,322			-			-			996			-			-			-			-			-			54,318

Operating income (expenses)		(6,812	)		(268	)		(746	)		(923	)		6			(1,026	)		(38	)		(6,960	)		(161	)		(16,928	)
Other income (loss)		139			-			1			(343	)		(38	)		-			-			(719	)		(2	)		(962	)
Finance items		1,737			30			(405	)		3			7			262			-			82			81			1,797
Income tax recovery (expenses)		(12,957	)		-			(3	)		201			-			(12	)		-			-			(2,433	)		(15,204	)
Net income (loss)	$	35,429		$	(238	)	$	(1,153	)	$	(66	)	$	(25	)	$	(776	)	$	(38	)	$	(7,597	)	$	(2,515	)	$	23,021

Attributable to:
Equity holders of the Company		27,637			(165	)		(894	)		(47	)		(24	)		(743	)		(38	)		(7,597	)		(2,515	)		15,614
Non-controlling interests		7,792			(73	)		(259	)		(19	)		(1	)		(33	)		-			-			-			7,407
Net income (loss)	$	35,429		$	(238	)	$	(1,153	)	$	(66	)	$	(25	)	$	(776	)	$	(38	)	$	(7,597	)	$	(2,515	)	$	23,021


Six months ended September 30, 2011
	China																Canada
		Henan																						Other			Total
Statement of operations:		Luoning			ZX/CX		SX Gold		Hunan			Guangdong			Other			Silvertip		Head Office				Regions
Sales	$	128,865		$	-	$	-	$	2,909		$	-		$	-		$	-		$	-		$	-		$	131,774
Cost of sales		(27,365	)		-		-		(1,129	)		-			-			-			-			-			(28,494	)
Gross profit		101,500			-		-		1,780			-			-			-			-			-			103,280
Operating income (expenses)		(8,924	)		-		-		(971	)		(989	)		(267	)		(66	)		(6,828	)		973			(17,072	)
Other income (loss)		217			-		-		12			(7	)		-			-			(1,490	)		(168	)		(1,436	)
Finance items		1,369			-		-		(21	)		76			2			-			281			27			1,734
Income tax recovery (expenses)		(22,871	)		-		-		111			-			-			-			-			(3,600	)		(26,360	)
Net income (loss)	$	71,291		$	-	$	-	$	911		$	(920	)	$	(265	)	$	(66	)	$	(8,037	)	$	(2,768	)	$	60,146
Attributable to:
Equity holders of the Company		55,437			-		-		638			(874	)		(217	)		(66	)		(8,037	)		(2,768	)		44,113
Non-controlling interests		15,854			-		-		273			(46	)		(48	)		-			-			-			16,033
Net income (loss)	$	71,291		$	-	$	-	$	911		$	(920	)	$	(265	)	$	(66	)	$	(8,037	)	$	(2,768	)	$	60,146

The sales generated for the three and six months ended September 30, 2012 and 2011 comprise:


		Three months ended September 30,				Six months ended September 30,
		2012		2011		2012		2011
Silver (Ag)	$	29,561	$	42,535	$	57,690	$	90,291
Gold (Au)		2,755		3,300		6,094		4,832
Lead (Pb)		10,749		14,145		21,932		32,081
Zinc (Zn)		2,144		2,075		4,042		4,570
	$	45,209	$	62,055	$	89,758	$	131,774

(d) Major customers

During the six months ended September 30, 2012, two major customers (six months ended September 30, 2011 - five) accounted for 23% and 54%, respectively (six months ended September 30, 2011 - 10% to 33%) and collectively 77% (six months ended September 30, 2011 - 88%) of the total sales of the Company.

SILVERCORP METALS INC.

Notes to Unaudited Consolidated Financial Statements

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


20.	COMMITMENTS

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


		Total		Less than 1 year		1-5 years		After 5 years
Operating leases	$	5,846	$	283	$	2,814	$	2,749
Commitments	$	8,854	$	2,436	$	-	$	6,418

As of September 30, 2012, the Company has two office rental agreements totaling $5,846 for the next eleven years and commitments of $8,854 related to the GC property.


21.	SUPPLEMENTARY CASH FLOW INFORMATION


		September 30, 2012		March 31, 2012
Cash on hand and at bank	$	55,413	$	79,062
Bank term deposits and GICs		33,921		30,898
Total cash and cash equivalents	$	89,334	$	109,960


	Three Months Ended September 30,						Six Months Ended September 30,
Net change in non-cash working capital		2012			2011			2012			2011
Accounts receivable	$	4,620		$	(429	)	$	9,651		$	(977	)
Inventory		(304	)		(59	)		(959	)		(101	)
Prepaid and deposits		(1,039	)		(918	)		(379	)		(1,633	)
Accounts payable and accrued liabilities		(1,709	)		(331	)		707			2,274
Income tax payable		1,806			2,805			(1,929	)		4,082
Deposits received		3,060			(1,053	)		(54	)		(9,720	)
	$	6,434		$	15		$	7,037		$	(6,075	)

Supplemental information:
Income tax paid	$	5,860		$	6,732		$	14,375		$	16,790

Non-cash transactions:
Acquisition and expenditure of plant and equipment included in
accounts payable and accrued liabilities	$	-		$	-		$	1,099		$	143
Acquisition and expenditure of mineral rights and properties included in
accounts payable and accrued liabilities	$	-		$	2,346		$	1,414		$	3,811

EX-99.3 4 exhibit99-3.htm MANAGEMENT'S DISCUSSION AND ANALYSIS FOR 2ND QUARTER ENDED SEPTEMBER 30, 2012 Exhibit 99.3

Exhibit 99.3

SILVERCORP METALS INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS

September 30, 2012

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


Table of Contents
1.	Core Business and Strategy	2
2.	Second Quarter Fiscal 2013 Highlights	2
3.	Operating Performance	3
4.	Second Quarter Fiscal 2013 Financial Results	16
5.	Liquidity and Capital Resources	18
6.	Financial Instruments and Related Risks	19
7.	Off-Balance Sheet Arrangements	21
8.	Transactions with Related Parties	21
9.	Critical Accounting Policies and Estimates	22
10.	Future Accounting Changes	24
11.	Other MD&A Requirements	24
12.	Outstanding Share Data	25
13.	Risks and Uncertainties	25
14.	Disclosure Controls and Procedures	26
15.	Changes in Internal Control over Financial Reporting	26
16.	Directors and Officers	26
Forward Looking Statements		26

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Three and Six Months Ended September 30, 2012

(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 and six months ended September 30, 2012 and the related notes contained therein. In addition, the following should be read in conjunction with the audited consolidated financial statements of the Company for the year ended March 31, 2012, the related MD&A, the Annual Information Form (available on SEDAR at www.sedar.com), and the annual report on Form 40-F. The Company reports its financial position, results of operations and cash flow in accordance with International Financial Reporting Standards (“IFRS”). Silvercorp’s significant accounting policies are set out in Note 2 of the unaudited consolidated financial statements for the three and six months ended September 30, 2012, as well as Note 2 to the audited consolidated financial statements for the year ended March 31, 2012. This MD&A refers to various non-IFRS measures, such as cash flow from operations per share and cash and total production cost per ounce of silver. Those measures are used by the Company to manage and evaluate operating performance and its ability to generate cash. These measures are widely reported in the silver mining industry as benchmarks for performance. Non-IFRS measures do not have standardized meanings under IFRS. Accordingly, non-IFRS measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. 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 November 9, 2012.


1.	Core Business and Strategy

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 of the four silver-lead-zinc mines at the Ying Mining District in Henan Province, China. In 2011, Silvercorp acquired the XBG and XHP silver-gold-zinc projects near the Ying Mining District in Henan Province, further consolidating the region. Silvercorp has commenced production at its second production foothold in China, the BYP gold-lead-zinc project in Hunan Province, and is currently completing construction of the GC silver-lead-zinc project in Guangdong Province which will become its third production base in China. In Canada, Silvercorp is preparing to apply for a Small Mine Permit for the Silvertip high-grade silver-lead-zinc mine project in northern British Columbia. The Company’s shares are traded on the New York Stock Exchange and the Toronto Stock Exchange and are included as a component of the S&P/TSX Composite and the S&P/TSX Global Mining Indexes.


2.	Second Quarter Fiscal 2013 Highlights

Silver production of 1.3 million ounces;
Gold production of 2,481 ounces;
Sales of $45.2 million;
Net income of $9.5 million, or $0.06 per share;
Cash flow from operations of $23.9 million, or $0.14 per share;
Cash costs of negative $0.74 per ounce of silver at the Ying Mining District¹;
Payment of $4.2 million, or CAD$0.025 per share, in quarterly dividends to shareholders.



¹Ying Mining District represents consolidated results from the SGX (Ying), HPG, TLP, and LM mines.


	Management’s Discussion and Analysis	Page 2

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Three and Six Months Ended September 30, 2012

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


3.	Operating Performance


a)	Mine Production

For the three months ended September 30, 2012 (“Q2 2013”), on a consolidated basis, the Company mined 240,447 tonnes of ore, a 16% increase compared to 207,296 tonnes in the three months ended September 30, 2011 (“Q2 2012”). For the six months ended September 30, 2012, the Company mined 451,407 tonnes of ore, a 17% increase compared to 386,414 tonnes in the same prior year period. The increased mine production was achieved through increases in production from the Ying Mining District, full operation of BYP mine compared to the prior year as well as the processing of development tunnelling ore at the X mines².


b)	Milling

On a consolidated basis, in Q2 2013, the Company milled 249,207 tonnes of ore, a 25% increase compared to 199,977 tonnes in Q2 2012. For the six months ended September 30, 2012, the Company milled 465,872 tonnes of ore, a 22% increase compared to 382,868 in the same prior year period. The Ying Mining District has a total milling capacity of 3,200 tonnes per day (“t/d”) or approximately 1 million tonnes per year. The BYP mine and X mines have current milling capacities of 500 t/d and 1,350 t/d respectively.


c)	Mining Cost

In Q2 2013, the consolidated total mining cost and the cash mining cost were $62.41 and $50.11 per tonne compared to $55.66 and $42.30 per tonne, respectively, in Q2 2012. The major components of cash mining cost consisted of: 39% for mining contractor costs (Q2 2012 – 42%); 16% for materials and supplies (Q2 2012 – 16%); 20% for labour costs (Q2 2012 – 21%); 6% for utility costs (Q2 2012 – 6%) and 19% for other costs (Q2 2012 – 15%).

For the six months ended September 30, 2012, the consolidated total mining cost and the cash mining cost were $64.20 and $50.49 per tonne compared to $56.32 and $44.13, respectively, in the same prior year period. The major components of cash mining cost consisted of: 39% for mining contractor costs (six months ended September 30, 2011 – 41%); 16% for materials and supplies (six months ended September 30, 2011 – 17%); 20% for labour costs (six months ended September 30, 2011 – 18%); 6% for utility costs (six months ended September 30, 2011 – 6%) and 19% for other costs (six months ended September 30, 2011 – 18%).

The increase in cash mining cost per tonne was mainly due to (i) an increase in labour costs for both the Company’s employees as well as those of its mining contractors, and (ii) the impact of US dollar depreciation versus the Chinese RMB.


d)	Milling Cost

In Q2 2013, the consolidated total milling cost and cash milling cost were $14.11 and $12.40 per tonne compared to $14.78 and $13.32 per tonne, respectively, in Q2 2012. The major components of cash milling costs consisted of: 21% for raw materials (Q2 2012 – 31%); 34% for utilities (Q2 2012 – 28%); 15% for mineral resources tax (Q2 2012 – 15%); 24% for labour costs (Q2 2012 – 20%) and 6% for milling related administrative and other costs (Q1 2012 – 6%).

For the six months ended September 30, 2012, the consolidated total milling cost and cash milling cost were $14.97 and $13.23 per tonne compared to $14.38 and $12.89 per tonne, respectively, in the same prior year period. The major components of cash milling costs consisted of: 23% for raw materials (six months ended September 30, 2011 – 29%); 34% for utilities (six months ended September 30, 2011 –30%); 14% for mineral resources tax (six months ended September 30, 2011 – 15%); 22% for labour costs (six months ended September 30, 2011 – 19%) and 7% for milling related administrative and other



²X mines represent consolidated results from the XBG and XHP projects.


	Management’s Discussion and Analysis	Page 3

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Three and Six Months Ended September 30, 2012

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

costs (six months ended September 30, 2011 – 7%).


e)	Metal Production

For the six months ended September 30, 2012, on a consolidated basis the Company produced 2.5 million ounces of silver, 5,134 ounces of gold, 27.6 million pounds of lead and 6.5 million pounds of zinc, compared to 3.0 million ounces of silver, 3,905 ounces of gold, 37.1 million pounds of lead and 7.3 million pounds of zinc, respectively, in the same prior year period.

The decreases in metal production compared to the prior year were due to lower overall head grades of ore mined at the Ying Mining District. The increase in gold production is attributed to the BYP mine now being in commercial production compared to prior year when it was still in initial production.


f)	Cash and Total Cost per Ounce of Silver (Gold from the BYP mine)

In Q2 2013, the consolidated total production cost and cash cost per ounce of silver were $1.05 and negative $0.74 compared to negative $2.74 and negative $4.55, respectively, in Q2 2012. The consolidated total production cost and cash cost per ounce of silver in this quarter has decreased $1.42 and $0.88 from $2.47 and $0.14, respectively, as compared to first quarter Fiscal 2013. The improvement is attributable to the decrease in overall production costs from $85 per tonne in the prior quarter to $80 per tonne in Q2 2013.

For the six months ended September 30, 2012, the consolidated total production cost and cash cost per ounce of silver were $1.75 and negative $0.31 compared to negative $3.75 and negative $5.39, respectively in the same prior year period. The increase was a result of higher production costs, noted above, and a decrease in by-product metal credits.

To facilitate a better understanding of cash and total production cost per ounce of silver (non-IFRS measures), the following tables provide a reconciliation of those measures to the financial statements for the three and six months ended September 30, 2012 and 2011, respectively:


Three months ended September 30, 2012
		Ying Mining
		District			Total
Cost of sales	$	15,514		$	15,514
By-product lead, zinc, and gold sales		(14,169	)		(14,169	)
Total adjusted cost of sales		1,345			1,345
Divided by thousands of silver ounces sold		1,277			1,277
Total production cost per ounce of silver	$	1.05		$	1.05

Total adjusted cost of sales	$	1,345		$	1,345
Amortization and depletion		(2,287	)		(2,287	)
Total adjusted cash cost		(942	)		(942	)
Divided by thousands of silver ounces sold		1,277			1,277
Total cash cost per ounce of silver	$	(0.74	)	$	(0.74	)


	Management’s Discussion and Analysis	Page 4

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Three and Six Months Ended September 30, 2012

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


Three months ended September 30, 2011
		Ying Mining
		District			Total
Cost of sales	$	13,469		$	13,469
By-product lead, zinc, and gold sales		(17,300	)		(17,300	)
Total adjusted cost of sales		(3,831	)		(3,831	)
Divided by thousands of silver ounces sold		1,396			1,396
Total production cost per ounce of silver	$	(2.74	)	$	(2.74	)

Total adjusted cost of sales	$	(3,831	)	$	(3,831	)
Amortization and depletion		(2,521	)		(2,521	)
Total adjusted cash cost		(6,352	)		(6,352	)
Divided by thousands of silver ounces sold		1,396			1,396
Total cash cost per ounce of silver	$	(4.55	)	$	(4.55	)

Six months ended September 30, 2012
		Ying Mining
		District			Total
Cost of sales	$	32,704		$	32,704
By-product lead, zinc, and gold sales		(28,336	)		(28,336	)
Total adjusted cost of sales		4,368			4,368
Divided by thousands of silver ounces sold		2,500			2,500
Total production cost per ounce of silver	$	1.75		$	1.75

Total adjusted cost of sales	$	4,368		$	4,368
Amortization and depletion		(5,141	)		(5,141	)
Total adjusted cash cost		(773	)		(773	)
Divided by thousands of silver ounces sold		2,500			2,500
Total cash cost per ounce of silver	$	(0.31	)	$	(0.31	)

Six months ended September 30, 2011
		Ying Mining
		District			Total
Cost of sales	$	27,365		$	27,365
By-product lead, zinc, and gold sales		(38,574	)		(38,574	)
Total adjusted cost of sales		(11,209	)		(11,209	)
Divided by thousands of silver ounces sold		2,988			2,988
Total production cost per ounce of silver	$	(3.75	)	$	(3.75	)

Total adjusted cost of sales	$	(11,209	)	$	(11,209	)
Amortization and depletion		(4,899	)		(4,899	)
Total adjusted cash cost		(16,108	)		(16,108	)
Divided by thousands of silver ounces sold		2,988			2,988
Total cash cost per ounce of silver	$	(5.39	)	$	(5.39	)


	Management’s Discussion and Analysis	Page 5

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Three and Six Months Ended September 30, 2012

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

The following tables provide a reconciliation of cash and total production cost per ounce of gold (non-IFRS measures) for production results from the BYP mine for the three and six months ended September 30, 2012 and 2011, respectively:


BYP
		Three months ended,			Six months ended,
		September 30, 2012			September 30, 2012
Cost of sales	$	932		$	2,736
By-product lead and zinc sales		-			-
Total adjusted cost of sales		932			2,736
Divided by thousands of gold ounces sold		1.2			2.9
Total production cost per ounce of gold	$	769		$	932

Total adjusted cost of sales	$	932		$	2,736
Amortization and depletion		(494	)		(1,304	)
Total adjusted cash cost		438			1,432
Divided by thousands of gold ounces sold		1.2			2.9
Total cash cost per ounce of gold	$	361		$	488

BYP
		Three months ended,			Six months ended,
		September 30, 2011			September 30, 2011
Cost of sales	$	966		$	1,129
By-product lead and zinc sales		-			-
Total adjusted cost of sales		966			1,129
Divided by thousands of gold ounces s old		1.6			2.2
Total production cost per ounce of gold	$	599		$	513

Total adjusted cost of sales	$	966		$	1,129
Amortiza tion and depletion		(521	)		(521	)
Total adjusted cash cost		445			608
Divided by thousands of gold ounces s old		1.6			2.2
Total cash cost per ounce of gold	$	276		$	276


	Management’s Discussion and Analysis	Page 6

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Three and Six Months Ended September 30, 2012

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


g)	Operation Review

The following table summarizes consolidated and each mining district’s operational information for the three months ended September 30, 2012:

Three months ended September 30, 2012

Ying Mining
District¹

X Mines²

BYP

Total

Production Data

Mine Data

Ore Mined (tonne)

Direct Smelting Ore (tonne)

2,442

Stockpiled Ore (tonne)

203,369

7,995

26,641

238,005

205,811

7,995

26,641

240,447

Run of Mine Ore (tonne)

Direct Smelting Ore (tonne)

2,442

Ore Milled (tonne)

200,728

27,473

18,564

246,765

203,170

27,473

18,564

249,207

Mining cost per tonne of ore mined ($)

62.56

61.24

62.41

Cash mining cost per tonne of ore mined ($)

53.27

25.71

50.11

Non cash mining cost per tonne of ore mined ($)

9.29

35.54

12.30

Unit shipping costs($)

3.73

3.30

Milling cost per tonne of ore milled ($)

13.84

17.03

14.11

Cash milling cost per tonne of ore milled ($)

12.12

15.50

12.40

Non cash milling cost per tonne of ore milled ($)

1.72

1.53

1.70

Average Production Cost

Silver ($ per ounce)

8.21

Gold ($ per ounce)

366

769

404

Lead ($ per pound)

0.28

Zinc ($ per pound)

0.22

Total production cost per ounce of Silver ($)

1.05

Total cash cost per ounce of Silver ($)

(0.74

)

(0.74

)

Total production cost per ounce of Gold ($)

769

Total cash cost per ounce of Gold ($)

361

Total Recovery of the Run of Mine Ore

Silver (%)

92.7

Gold (%)

94.1

Lead (%)

94.3

Zinc (%)

69.6

Head Grades of Run of Mine Ore

Silver (gram/tonne)

224

Gold (gram/tonne)

3.3

Lead (%)

3.4

Zinc (%)

1.2

Sales Data

Metal Sales

Silver (in thousands of ounces)

1,277

1,286

Gold (in thousands of ounces)

1.3

1.2

2.5

Lead (in thousands of pounds)

13,403

494

13,897

Zinc (in thousands of pounds)

3,412

111

3,523

Metal Sales

Silver (in thousands of $)

29,561

Gold (in thousands of $)

1,275

1,480

2,755

Lead (in thousands of $)

10,749

Zinc (in thousands of $)

2,144

43,729

1,480

45,209

Average Selling Price, Net of Value Added Tax and Smelter Charges

Silver ($ per ounce)

23.15

Gold ($ per ounce)

1,030

1,220

1,111

Lead ($ per pound)

0.80

Zinc ($ per pound)

0.63

¹Ying Mining District includes mines: SGX (Ying), TLP, HPG&LM.
²X Mines includes the XBG project and XHP project.
* Represents development tunnelling ore at XHP Project.


	Management’s Discussion and Analysis	Page 7

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Three and Six Months Ended September 30, 2012

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

The following table summarizes consolidated and each mining district’s operational information for the three months ended September 30, 2011:


	Three months ended September 30, 2011
		Ying Mining District¹		X Mines²	BYP	Total
Production Data
Mine Data
Ore Mined (tonne)
Direct Smelting Ore (tonne)		2,579		-	-	2,579
Stockpiled Ore (tonne)		179,963		-	24,754	204,717
		182,542		-	24,754	207,296
Run of Mine Ore (tonne)
Direct Smelting Ore (tonne)		2,579		-	-	2,579
Ore Milled (tonne)		177,585		-	19,813	197,398
		180,164		-	19,813	199,977
Mining cost per tonne of ore mined ($)		57.23		-	44.11	55.66
Cash mining cost per tonne of ore mined ($)		45.74		-	16.95	42.30
Non cash mining cost per tonne of ore mined ($)		11.49		-	27.16	13.36

Unit shipping costs($)		3.78		-	-	3.33

Milling cost per tonne of ore milled ($)		15.03		-	12.53	14.78
Cash milling cost per tonne of ore milled ($)		13.48		-	11.87	13.32
Non cash milling cost per tonne of ore milled ($)		1.54		-	0.66	1.45

Average Production Cost
Silver ($ per ounce)		7.09		-	-	7.09
Gold ($ per ounce)		270		-	599	305
Lead ($ per pound)		0.20		-	-	0.20
Zinc ($ per pound)		0.15		-	-	0.15

Total production cost per ounce of Silver ($)		(2.74	)	-		(2.74	)
Total cash cost per ounce of Silver ($)		(4.55	)	-		(4.55	)

Total production cost per ounce of Gold ($)					599	599
Total cash cost per ounce of Gold ($)					276	276

Total Recovery of the Run of Mine Ore
Silver (%)		92.1		-		92.1
Gold (%)				-	89.1	89.1
Lead (%)		94.7		-		94.7
Zinc ( %)		75.1		-	-	75.1

Head Grades of Run of Mine Ore
Silver (gram/tonne)		271		-		271
Gold (gram/tonne)				-	3.3	3.3
Lead (%)		4.6		-		4.6
Zinc (%)		1.2		-	-	1.2

Sales Data
Metal Sales
Silver (in thousands of ounces)		1,396		-	-	1,396
Gold (in thousands of ounces)		0.9		-	1.6	2.5
Lead (in thousands of pounds)		16,520		-	-	16,520
Zinc (in thousands of pounds)		3,236		-	-	3,236

Metal Sales
Silver (in thousands of $)		42,535		-	-	42,535
Gold (in thousands of $)		1,081		-	2,220	3,301
Lead (in thousands of $)		14,145		-	-	14,145
Zinc (in thousands of $)		2,074		-	-	2,074
		59,835		-	2,220	62,055
Average Selling Price, Net of Value Added Tax and Smelter Charges
Silver ($ per ounce)		30.48		-	-	30.48
Gold ($ per ounce)		1,198		-	1,376	1,313
Lead ($ per pound)		0.86		-	-	0.86
Zinc ($ per pound)		0.64		-	-	0.64

¹Ying Mining District includes mines: SGX (Ying), TLP, HPG&LM.
²X Mines includes the XBG project and XHP project.


	Management’s Discussion and Analysis	Page 8

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Three and Six Months Ended September 30, 2012

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

The following table summarizes consolidated and each mining district’s operational information for the six months ended September 30, 2012:

Six months ended September 30, 2012

Ying Mining
District¹

X Mines²

BYP

Total

Production Data

Mine Data

Ore Mined (tonne)

Direct Smelting Ore (tonne)

4,693

Stockpiled Ore (tonne)

382,136

10,377

54,201

446,714

386,829

10,377

54,201

451,407

Run of Mine Ore (tonne)

Direct Smelting Ore (tonne)

4,693

Ore Milled (tonne)

384,932

31,084

45,163

461,179

389,625

31,084

45,163

465,872

Mining cost per tonne of ore mined ($)

65.58

54.38

64.20

Cash mining cost per tonne of ore mined ($)

54.30

23.30

50.49

Non cash mining cost per tonne of ore mined ($)

11.28

31.08

13.71

Unit shipping costs($)

3.79

3.32

Milling cost per tonne of ore milled ($)

14.90

15.61

14.97

Cash milling cost per tonne of ore milled ($)

13.10

14.36

13.23

Non cash milling cost per tonne of ore milled ($)

1.79

1.25

1.74

Average Production Cost

Silver ($ per ounce)

8.77

Gold ($ per ounce)

434

932

469

Lead ($ per pound)

0.31

Zinc ($ per pound)

0.24

Total production cost per ounce of Silver ($)

1.75

Total cash cost per ounce of Silver ($)

(0.31

)

(0.31

)

Total production cost per ounce of Gold ($)

932

Total cash cost per ounce of Gold ($)

488

Total Recovery of the Run of Mine Ore

Silver (%)

92.2

Gold (%)

91.7

Lead (%)

94.1

Zinc (%)

66.5

Head Grades of Run of Mine Ore

Silver (gram/tonne)

226

Gold (gram/tonne)

2.8

Lead (%)

3.5

Zinc (%)

1.2

Sales Data

Metal Sales

Silver (in thousands of ounces)

2,500

2,510

Gold (in thousands of ounces)

2.1

0.1

2.9

5.1

Lead (in thousands of pounds)

27,116

525

27,641

Zinc (in thousands of pounds)

6,386

111

6,497

Metal Sales

Silver (in thousands of $)

57,690

Gold (in thousands of $)

2,362

3,732

6,094

Lead (in thousands of $)

21,932

Zinc (in thousands of $)

4,042

86,026

3,732

89,758

Average Selling Price, Net of Value Added Tax and Smelter Charges

Silver ($ per ounce)

23.07

Gold ($ per ounce)

1,142

1,271

1,187

Lead ($ per pound)

0.81

Zinc ($ per pound)

0.63

¹Ying Mining District includes mines: SGX (Ying), TLP, HPG&LM.
²X Mines includes the XBG project and XHP project.
* Represents development tunnelling ore at XHP Project.


	Management’s Discussion and Analysis	Page 9

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Three and Six Months Ended September 30, 2012

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

The following table summarizes consolidated and each mining district’s operational information for the six months ended September 30, 2011:


	Six months ended September 30, 2011
		Ying Mining District¹		X Mines²	BYP	Total
Production Data
Mine Data
Ore Mined (tonne)
Direct Smelting Ore (tonne)		5,686		-	-	5,686
Stockpiled Ore (tonne)		347,061		-	33,667	380,728
		352,747		-	33,667	386,414
Run of Mine Ore (tonne)
Direct Smelting Ore (tonne)		5,687		-	-	5,687
Ore Milled (tonne)		349,404		-	27,777	377,181
		355,091		-	27,777	382,868
Mining cost per tonne of ore mined ($)		58.57		-	32.71	56.32
Cash mining cost per tonne of ore mined ($)		47.15		-	12.46	44.13
Non cash mining cost per tonne of ore mined ($)		11.42		-	20.25	12.19

Unit shipping costs($)		3.80		-	-	3.47

Milling cost per tonne of ore milled ($)		14.33		-	15.05	14.38
Cash milling cost per tonne of ore milled ($)		12.78		-	14.35	12.89
Non cash milling cost per tonne of ore milled ($)		1.55		-	0.70	1.49

Average Production Cost
Silver ($ per ounce)		6.53		-	-	6.53
Gold ($ per ounce)		257		-	513	268
Lead ($ per pound)		0.19		-	-	0.19
Zinc ($ per pound)		0.13		-	-	0.13

Total production cost per ounce of Silver ($)		(3.75	)	-		(3.75	)
Total cash cost per ounce of Silver ($)		(5.39	)	-		(5.39	)

Total production cost per ounce of Gold ($)					513	513
Total cash cost per ounce of Gold ($)					276	276

Total Recovery of the Run of Mine Ore
Silver (%)		91.7		-		91.7
Gold (%)				-	86.7	86.7
Lead (%)		94.7		-		94.7
Zinc ( %)		73.9		-	-	73.9

Head Grades of Run of Mine Ore
Silver (gram/tonne)		287		-		287
Gold (gram/tonne)				-	2.9	2.9
Lead (%)		5.0		-		5.0
Zinc (%)		1.4		-	-	1.4

Sales Data
Metal Sales
Silver (in thousands of ounces)		2,988		-	-	2,988
Gold (in thousands of ounces)		1.7		-	2.2	3.9
Lead (in thousands of pounds)		37,142		-	-	37,142
Zinc (in thousands of pounds)		7,339		-	-	7,339

Metal Sales
Silver (in thousands of $)		90,291		-	-	90,291
Gold (in thousands of $)		1,923		-	2,909	4,832
Lead (in thousands of $)		32,081		-	-	32,081
Zinc (in thousands of $)		4,570		-	-	4,570
		128,865		-	2,909	131,774
Average Selling Price, Net of Value Added Tax and Smelter Charges
Silver ($ per ounce)		30.22		-		30.22
Gold ($ per ounce)		1,130		-	1,321	1,237
Lead ($ per pound)		0.86		-		0.86
Zinc ($ per pound)		0.62		-	-	0.62

¹Ying Mining District includes mines: SGX (Ying), TLP, HPG&LM.
²X Mines includes the XBG project and XHP project.


	Management’s Discussion and Analysis	Page 10

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Three and Six Months Ended September 30, 2012

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


	(i)	Ying Mining District

The Ying Mining District consists of four mines; SGX (Ying), HPG, TLP and LM and is the Company’s primary source of production.

In Q2 2013, the total ore mined at the Ying Mining District was 205,811 tonnes, of which 2,442 tonnes was direct smelting ore, an increase of 13% compared to total ore production of 182,542 tonnes in Q2 2012. For the six months ended September 30, 2012, the total ore mined at the Ying Mining District was 386,829 tonnes, an increase of 10% compared to total ore production of 352,747 in the same prior year period.

In Q2 2013, head grades at the Ying Mining District were 224 g/t for silver, 3.4% for lead, and 1.2% for zinc, compared to 271 g/t for silver, 4.6% for lead and 1.2% for zinc, respectively, in Q2 2012. For the six months ended September 30, 2012, head grades were 226 g/t for silver, 3.5% for lead, and 1.2% for zinc, compared to 287 g/t for silver, 5.0% for lead and 1.4% for zinc, respectively, in the same prior year period.

Compared to Q2 2012, production from HPG, TLP, and LM satellite mines in this quarter increased by 10% and represent 43% of total production at the Ying Mining District compared to 33% in the prior year. The reduction in production from the SGX mine is also a result of mechanical problems with one of the shafts which impacted production for 20 days during the quarter. This shaft is fully operational again but as a result of this issue, the Ying Mining District realized lower overall grades in this quarter.

In Q2 2013, the Ying Mining District produced 1.3 million ounces of silver, 1,238 ounces of gold, 13.4 million pounds of lead and 3.4 million pounds of zinc, compared to metal production in Q2 2012 of 1.4 million ounces of silver, 903 ounces of gold, 16.5 million pounds of lead and 3.2 million pounds of zinc.

Compared with metal production in first quarter of Fiscal 2013, there has been a 9% increase in silver production attributable to a 9% increase in ore processed. For the six months ended September 30, 2012, the Ying Mining District produced 2.5 million ounces of silver, 2,067 ounces of gold, 27.1 million pounds of lead and 6.4 million pounds of zinc, compared to metal production of 3.0 million ounces of silver, 1,703 ounces of gold, 37.1 million pounds of lead and 7.3 million pounds of zinc in the same prior year period. As at September 30, 2012, inventory of 480 tonnes of direct smelting ore and 100 tonnes of lead concentrate remains on hand at the Ying Mining District, which is approximately 55,000 ounces of silver produced but not sold.

In Q2 2013, total and cash mining costs per tonne were $62.56 and $53.27 compared to $57.23 and $45.74, respectively, in Q2 2012. For the six months ended September 30, 2012, total and cash mining costs per tonne were $65.58 and $54.30 compared to $58.57 and $47.15, respectively, compared to the same prior year period. The increase in cash mining costs was mainly due to the following: (i) an increase in labour costs for both the Company’s employees as well as those of its mining contractors of approximately $3.80 per tonne, and (ii) an increase in mining administration and preparation costs of $2.00 per tonne (iii) the impact of US dollar depreciation versus the Chinese RMB of approximately $1.00 per tonne. However, compared to the first quarter of Fiscal 2013, total and cash mining costs decreased by 9% and 4%, respectively.

In Q2 2013, total ore milled was 203,170 tonnes, an increase of 13% compared to 180,164 tonnes in Q2 2012. For the six months ended September 30, 2012, total ore milled was 389,625, an increase of 10% compared to 355,091 tonnes in the same prior year period. In Q2 2013, cash milling costs were $12.12 compared to $13.48 in Q2 2012 attributable to the increased tonnage milled. For the six months ended September 30, 2012, cash milling costs were $13.10 compared to $12.78 in the same prior year period.

Including by-product credits, in Q2 2013, total cost and cash cost per ounce of silver were $1.05 and negative $0.74 compared to negative $2.74 and negative $4.55, respectively, in Q2 2012. For the six months ended September 30, 2012, total cost and cash cost per ounce of silver were $1.75 and negative $0.31 compared to negative $3.75 and negative $5.39, respectively, in the same prior year


	Management’s Discussion and Analysis	Page 11

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Three and Six Months Ended September 30, 2012

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

period. The increase was a result of higher production costs and a decrease in by-product metal credits compared to prior year.

Comparing to the first quarter Fiscal 2013, the total cost and cash cost per ounce of silver in this quarter decreased $1.44 and $0.90 from $2.47 and $0.16, respectively. The improvement is attributable to lower overall production cost compared to the prior quarter.

Exploration and Development

In Q2 2013, exploration and development expenditure for the Ying Mining District was $9.4 million compared to $6.8 million in Q2 2012. For the six months ended September 30, 2012, exploration and development expenditure for the Ying Mining District was $19.0 million compared to $12.3 million in the same period for the prior year.

SGX (Ying) Mine - Exploration and Development

As at the end of Q2 2013, the Company had completed a total of 1,407 metres (“m”) of development work for a 5,200m ramp at the SGX mine, making construction of the ramp now 27% complete. The ramp is designed to follow the main S7-1 vein from the 450m elevation to the 150m elevation and then bottom at the zero metre elevation, where it will be connected to three existing vertical blind shafts. Silvercorp expects to complete construction of the ramp in calendar 2015 but as construction progresses the ramp is expected to increase production capacity at the SGX mine with effect from the second quarter of Fiscal 2014.

In Q2 2013, the Company also developed 7,300m of horizontal tunnels and completed 15,000m of underground drilling at the SGX mine.

To support the ongoing expansion work at SGX, the Company has also commenced construction of a new 5,000m²facility which will include offices and dormitories.

LM Mine and LM Mine West - Exploration and Development

In Q2 2013, the Company also developed 5,000m of decline and horizontal tunnels and completed 12,500m of underground drilling at the LM Mine and LM West.


	Management’s Discussion and Analysis	Page 12

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Three and Six Months Ended September 30, 2012

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

TLP Mine - Exploration and Development

HPG Mine - Exploration and Development

Adoption of New Mining Method

With effect from October 2012, and following a reduction in the cut-off grades for the Ying Mining District Resource as per the 2012 NI 43-101 Technical Report prepared by AMC Consultants, the Company has started to gradually increase the use of the shrinkage method for mining. As such the mining width has been increased and the cut-off grades have been lowered to 150 g/t AgEq at the SGX (Ying) mine, and 110 g/t AgEq at HPG, LM and TLP mines.

The expected benefits of the change in mining method are:

	-	Lower cash mining cost per tonne - the short-hole shrinkage method have a cash mining cost of $32 per tonne compared to $75 per tonne for the resuing method.

	-	Less development work required - due to the increase in mining stope width, less mine tunnel development work will be required to produce the same amount of ore.

	-	Higher tonnage produced - as less tunnelling is required, this is expected to have a positive effect on hauling capacity and therefore allow for an increase in production.

	-	Increase in operational efficiency - reducing the number of stopes required to produce the same amount of ore will result in a more focused and efficient mining operation.

It should be noted that the impact to overall head grades for the Ying Mining District following the adoption of the new mining method is currently unknown.


	(ii)	GC Project

The Company continued to progress the development of the GC project.


	Management’s Discussion and Analysis	Page 13

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Three and Six Months Ended September 30, 2012

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

The construction of a lab, administrative offices and dormitory facilities were completed as of Q2 2013.

(iii)

BYP Mine

In Q2 2013, the total ore mined was 26,641 tonnes compared to 24,754 tonnes in Q2 2012. For the six months ended September 30, 2012, the total ore mined was 54,201 tonnes compared to 33,667 tonnes in the same prior year period. In Q2 2013 and for the six months ended September 30, 2012, the Company sold 1,212 ounces of gold and 2,937 ounces of gold, respectively, compared to 1,613 ounces of gold and 2,202 ounces of gold in the same prior year periods. Cash cost per ounce of gold was $361 and $488 in Q2 2013 and for the six months ended September 30, 2012 compared to $276 and $276, respectively, in the same prior year periods.

In Q2 2013, the Company released an update to the BYP mine NI 43-101 technical report, with indicated resources of 292,000 ounces of gold, 187 million pounds of lead and 408 million pounds of zinc.

In Q2 2013, exploration and development expenditures at the BYP mine were $1.3 million compared to $1.0 million in Q2 2012. For the six months ended September 30, 2012, exploration and development expenditures at the BYP mine were $2.6 million compared to $1.9 million in the same prior year period.

(iv)

X Mines


	Management’s Discussion and Analysis	Page 14

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Three and Six Months Ended September 30, 2012

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

and underground mapping and systematic sampling, surface and underground diamond drilling, with the intention of defining a NI 43-101 compliant mineral resource. Exploration and mine development at the X mines will be partially supported from cash flows generated from limited tunneling ore and existing ore stockpiles.

In Q2 2013, exploration and development expenditures at the X Mines was $2.2 million. For the six months ended September 30, 2012, exploration and development expenditures at the X Mines were $3.9 million. In the same prior year periods, no such expenditures were incurred.

(v)

RZY Project

In Q2 2013, the Company commenced its first diamond drilling program at the RZY project. In Q2 2013, the Company incurred $0.8 million of exploration expenditure at the RZY project with five diamond drill holes and 833m of drilling completed.

(vi)

Silvertip Project

The Silvertip Project is located in British Columbia, Canada. In Q1 2013, the Company released an update to the Silvertip NI 43-101 technical report, with indicated resources of 25 million ounces of silver.


	Management’s Discussion and Analysis	Page 15

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Three and Six Months Ended September 30, 2012

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


4.	Second Quarter Fiscal 2013 Financial Results

The tables below set out selected quarterly results for the past eight quarters:


	Sept 30, 2012	Jun 30, 2012	Mar 31, 2012	Dec 31, 2011
Sales	$ 45,209	$ 44,549	$ 44,312	$ 61,876
Gross profit	28,763	25,555	29,983	43,550
Expenses and foreign exchange	(9,062)	(7,841)	(9,458)	(8,534)
Other items	1,079	(229)	1,188	3,641
Net income, attributable to the shareholders of the Company	9,500	6,114	9,700	20,025
Basic earnings per share	0.06	0.04	0.06	0.12
Diluted earnings per share	0.06	0.04	0.06	0.12
Cash dividend declared	4,255	4,224	4,271	4,194
Cash dividend declared per share (CAD)	0.025	0.025	0.025	0.025


	Sept 30, 2011	Jun 30, 2011	Mar 31, 2011	Dec 31, 2010
Sales	$ 62,055	$ 69,719	$ 42,422	$ 51,838
Gross profit	47,620	55,660	32,250	40,059
Expenses and foreign exchange	(8,420)	(8,399)	(8,725)	(5,592)
Other items	488	443	392	7,117
Net income, attributable to the shareholders of the Company	18,471	25,642	12,019	29,079
Basic earnings per share	0.11	0.15	0.07	0.17
Diluted earnings per share	0.11	0.15	0.07	0.17
Cash dividend declared	3,500	3,619	3,600	3,511
Cash dividend declared per share (CAD)	0.02	0.02	0.02	0.02

Financial results including sales, gross profit, net income, basic earnings per share, and diluted earnings per share are heavily influenced by changes in commodity prices, particularly, the silver price.

Net income attributable to the shareholders of the Company in Q2 2013 was $9.5 million, or $0.06 per share compared to net income of $18.5 million, or $0.11 per share, in Q2 2012. Compared to first quarter of Fiscal 2013, net income has increased $3.4 million or 55%. For the six months ended September 30, 2012, net income was $15.6 million or $0.09 per share compared to net income of $44.1 million or $0.25 per share, in the same prior year period. The decrease compared to prior year was primarily due to lower sales and higher production costs as well as fluctuations in foreign currency.

Sales in Q2 2013 were $45.2 million compared to $62.1 million in Q2 2012. For the six months ended September 30, 2012, sales were $89.8 million compared to $131.8 million in the same prior year period. The decrease was due to lower silver price and lower metal production. The price per ounce of silver in Q2 2013 and the six months ended September 30, 2012 were both 24% lower compared to the same prior year periods.

The net realized selling price is calculated using Shanghai Metal Exchange (“SME”) prices, less smelter charges and recovery, and a value added tax (“VAT”) at a rate of 17% (note that VAT is not applied to gold sales). The following table is a reconciliation of the Company’s net realized selling prices in Q2 2013, including a comparison with London Metal Exchange (“LME”) prices:


	Management’s Discussion and Analysis	Page 16


SILVERCORP METALS INC.
Management’s Discussion and Analysis
For the Three and Six Months Ended September 30, 2012
(Expressed in thousands of U.S. dollars, unless otherwise stated)


		Silver (in US$/ounce)				Gold (in US$/ounce)				Lead (in US$/pound)				Zinc (in US$/pound)
		Q2 2013		Q2 2012		Q2 2013		Q2 2012		Q2 2013		Q2 2012		Q2 2013		Q2 2012
Net realized selling prices	$	23.15	$	30.48	$	1,111	$	1,313	$	0.80	$	0.86	$	0.63	$	0.64
Add back: Value added taxes		3.94		5.18		-		-		0.14		0.15		0.11		0.11
Add back: Smelter charges and recovery		3.41		4.47		542		399		0.14		0.14		0.31		0.45
SME	$	30.50	$	40.13	$	1,653	$	1,712	$	1.08	$	1.15	$	1.05	$	1.20
LME	$	29.80	$	38.92	$	1,651	$	1,709	$	0.90	$	1.11	$	0.85	$	1.01

Cost of sales in Q2 2013 was $16.4 million, an increase of 14%, compared to $14.4 million in Q2 2012. The cost of sales included cash costs of $13.7 million compared to $11.4 million in Q2 2012. For the six months ended September 30, 2012, cost of sales was $35.4 million (cash costs $29.0 million) compared to $28.5 million (cash costs – $5.4 million) in the same prior year period. The increase in cost of sales was due to more ore being mined and processed along with higher production costs per tonne. For the six months ended September 30, 2012, ore production increased by 17% while overall production costs increased by 11% compared to the same prior year period. Compared to the first quarter Fiscal 2013, overall production costs have decreased from $85 per tonne to $80 per tonne.

Gross profit margin in Q2 2013 was 64% compared to 77% in Q2 2012. For the six months ended September 30, 2012, gross profit margin was 61% compared to 78% in the same prior year period.

General and administrative (“G&A”) expenses in Q2 2013 were $6.2 million compared to $7.5 million in Q2 2012. The decrease is due to $1.5 million of additional expenses incurred in Q2 2012 related to defending the Company against the “short and distort” campaign whereas in Q2 2013 such expenses decreased to $0.6 million.

For the six months ended September 30, 2012, G&A expenses were $13.0 million compared to $12.4 million in the same prior year period. The increase is mainly due to the Company now having three projects under development compared to two projects last year. Significant items included in general and administrative expenses in Q2 2013 and the six months ended September 30, 2012, respectively, are as follows:

	(a)	Office and administrative expenses of $2.5 million and $5.8 million (Q2 2012 $3.3 million, six months ended September 30, 2011 $5.6 million);

	(b)	Salaries and benefits of $2.2 million and $4.3 million (Q2 2012 $2.0 million, six months ended September 30, 2011 $3.8 million);

	(c)	Stock based compensation expense of $872 and $1.6 million (Q2 2012 $840, six months ended September 30, 2011 $1.6 million);

	(d)	Professional fees of $654 and $1.3 million (Q2 2012 $1.3 million, six months ended September 30, 2011 $1.4 million).

General exploration and property investigation expenses in Q2 2013 and the six months ended September 30, 2012 were $887 and $1.9 million (Q2 2012 $1.2 million, six months ended September 30, 2012 $3.0 million). The decrease was due to less expense incurred proportionally to the sales.

Foreign exchange gain or loss in Q2 2013 and six months ended September 30, 2012 were losses of $1.1 million and $365 (Q2 2012 $1.3 million gain, six months ended September 30, 2011 $760 gain), respectively. The foreign exchange loss was mainly driven by the weakening of the RMB and US dollar against the functional currency of the entity that held such deposits.

Loss on disposal of plant and equipment in Q2 2013 and six months ended September 30, 2012 was $5 and $25 (Q2 2012 $171, six months ended September 30, 2011 $253), respectively, which was mainly due to the disposal of obsolete equipment.

Share of gain or loss in an associate in Q2 2013 and six months ended September 30, 2012 was $182 and $189 (Q2 2012 $116 gain, six months ended September 30, 2011 $92 gain), respectively, representing the Company’s equity pickup in New Pacific Metals Corp. (“New Pacific”). The Company


	Management’s Discussion and Analysis	Page 17

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Three and Six Months Ended September 30, 2012

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

recorded on the statement of income its proportionate share of New Pacific’s net gain or loss, as the Company is able to exercise significant influence over the financial and operating policies of New Pacific.

Write down of inventory in Q2 2013 and six months ended September 30, 2012 was $348 and $348 (Q2 2012 $nil, six months ended September 30, 2011 $nil), respectively, representing stockpile and concentrate inventory that was written down to its net realizable value.

Gain or loss on investments in Q2 2013 and six months ended September 30, 2012 was $693 gain and $593 loss (Q2 2012 $670 loss, six months ended September 30, 2011 – $1.8 million loss), respectively. The Company has been acquiring, on open market or by participating in private placements, equity interests in other publicly-traded mining companies. These equity interests, including common shares and warrants are for long-term investment purpose. Due to their nature, warrants meet the definition of derivatives and are accounted for as “Fair value through profit and loss” (“FVTPL”). The fair value of warrants was determined using the Black-Scholes pricing model as at the acquisition date as well as at each period end. Gain or loss in such securities, arising from changes in the fair value of the warrants, is included in net income for the period in which they arise.

Finance income in Q2 2013 and six months ended September 30, 2012 was $851 and $1.8 million (Q2 2012 $1.1 million, six months ended September 30, 2011 – $1.8 million), respectively. The Company invests in high yield short-term investments as well as long-term corporate bonds.

Finance costs in Q2 2013 and six months ended September 30, 2012 was $23 and $45 (Q2 2012 $23, six months ended September 30, 2011 – $46), respectively. As the Company does not hold any interest bearing debt, the finance cost in the current period relates to the accretion of environmental rehabilitation.

Income tax expense in Q2 2013 was $7.3 million (Q2 2012 $13.8 million). The income tax expenses recorded in Q2 2013 included current income tax expense of $7.2 million (Q2 2012 – $9.4 million) and deferred income tax expense of $129 (Q2 2012 – $4.4 million). For the six months ended September 30, 2012, income tax expenses were $15.2 million (current tax $12.1 million, deferred tax $3.1 million) compared to $26.4 million (current tax $20.9 million, deferred tax $5.5 million) in the same prior year period.

Of the deferred income tax expense recorded in the current year, $2.4 million relates to withholding tax accrual for anticipated future dividend repatriation from the Company’s Chinese subsidiary. The decrease in current income tax expense was mainly due to lower taxable income in the current period.


5.	Liquidity and Capital Resources

Cash and cash equivalents and short term investments as at September 30, 2012 was $136.6 million.

Working capital as at September 30, 2012 was $112.0 million.

Cash flows provided by operating activities were $23.9 million or $0.14 per share, in Q2 2013 compared to $35.2 million or $0.20 per share in Q2 2012. For the six months ended September 30, 2012, cash flows provided by operating activities were $43.2 million or $0.25 per share compared to $69.1 million or $0.40 per share in the same prior year period.

The decrease in cash flow from operations is mainly due to lower operating earnings as a result of lower metal production and lower metal prices as compared to same prior year periods.

Cash flows used in investing activities were $9.7 million in Q2 2013, comprising mainly cash used in capital expenditures, including prepayments, of $22.1 million offset by net redemption of short term investments and other investments of $12.4 million. In Q2 2012, cash flows used in investing activities were $23.9 million comprising mainly cash used in capital expenditures, including prepayments, of $33.3 million, cash used in acquisition of subsidiary of $3.4 million offset by net redemption of short-term investments of $12.8 million.


	Management’s Discussion and Analysis	Page 18

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Three and Six Months Ended September 30, 2012

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

For the six months ended September 30, 2012, cash flows used in investing activities were $46.9 million comprising mainly cash used in capital expenditures, including prepayments, of $44.0 million and net purchases of short-term investments of $3.0 million. In the same prior year period, cash flows used in investing activities were $41.5 million comprising mainly cash used in capital expenditures, including prepayments, of $44.9 million, cash used in acquisition of subsidiary of $3.4 million offset by net redemption of short-term and other investments of $6.8 million.

Cash flows used in financing activities were $11.3 million in Q2 2013, comprising mainly cash dividends paid of $4.2 million and distributions to non-controlling interests of $7.4 million. In Q2 2012, cash flow used in financing activities were $49.6 million, comprising mainly cash dividends paid of $3.7 million and advances to related parties of $11.1 million, and cash used to repurchase the Company’s shares as part of the normal course issuer bid of $35.4 million.

For the six months ended September 30, 2012, cash flows used in financing activities were $15.5 million, comprising mainly cash dividends paid of $8.5 million and distributions to non-controlling interests of $7.4 million. In the same prior year period, cash flows used in financing activities were $48.9 million, comprising mainly cash dividends paid of $7.3 million, advances to related parties of $12.3 million, cash used to repurchase the Company’s shares as part of the normal course issuer bid of $35.4 million offset by non-controlling interest contributions of $5.2 million.

Contractual commitments and contingencies not disclosed elsewhere in this Management’s Discussion and Analysis are as follows:


		Total		Less than 1 year		1-5 years		After 5 years
Operating leases	$	5,846	$	283	$	2,814	$	2,749
Commitments	$	8,854	$	2,436	$		$	6,418

As of September 30, 2012, the Company has two office rental agreements totaling $5,846 for the next eleven years and commitments of $8,854 related to the GC property.

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 believes it has sufficient capital to meet its cash needs for the next 12 months, including the costs of compliance with continuing reporting requirements.


6.	Financial Instruments and Related Risks

(a)

Fair value


	Management’s Discussion and Analysis	Page 19

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Three and Six Months Ended September 30, 2012

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

Level 1 – Unadjusted quoted prices at the measurement date for identical assets or liabilities in active markets.

Level 3 – Unobservable inputs which are supported by little or no market activity.


		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	89,334	$	-	$	-	$	89,334
Common shares of publicly traded companies		8,636		-		-		8,636
Yongning Smelting Co. Ltd.		-		-		9,546		9,546
Jinduicheng Xise (Canada) Co. Ltd.		-		-		22,395		22,395
Warrants		-		-		1,723		1,723

Fair value of the other financial instruments excluded from the table above approximates to their carrying amount as of September 30, 2012 and March 31, 2012, respectively.

(b)

Liquidity risk


		September 30, 2012		March 31, 2012
	Within a year
Accounts payable and accrued liabilities	$	26,738	$	23,590
Dividends payable		4,339		4,271
	$	31,077	$	27,861

(c)

Foreign exchange risk

The Company undertakes transactions denominated in foreign currencies and is exposed to foreign exchange risk arising from such transactions.

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:


	Management’s Discussion and Analysis	Page 20

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Three and Six Months Ended September 30, 2012

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


		September 30, 2012		March 31, 2012
Financial assets denominated in U.S. Dollars	$	16,494	$	18,510
Financial assets denominated in Chinese RMB	$	116,196	$	33,542

As at September 30, 2012, with other variables unchanged, a 1% strengthening (weakening) of the RMB against the USD would have increased (decreased) net income by approximately $1.2 million.

As at September 30, 2012, with other variables unchanged, a 1% strengthening (weakening) of the CAD against the USD would have decreased (increased) net income by approximately $0.2 million.

(d)

Interest rate risk

(e)

Credit risk

(f)

Equity price risk


7.	Off-Balance Sheet Arrangements

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


8.	Transactions with Related Parties


Related party transactions not disclosed elsewhere in this MD&A are as follows:

Due from related parties		September 30, 2012		March 31, 2012
New Pacific (a)	$	70	$	95
Henan Non-ferrous Geology Bureau (b)		17		17
Z.X. Zhu (e)		282		567
	$	369	$	679

(a)	According to a services and administrative costs reallocation agreement between the Company and New Pacific, the Company recovers costs for services rendered to New Pacific and expenses


	Management’s Discussion and Analysis	Page 21

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Three and Six Months Ended September 30, 2012

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

incurred on behalf of New Pacific. During the three and six months ended September 30, 2012, the Company recovered $143 and $269, respectively (for the three and six months ended September 30, 2011 $302 and $379, respectively) from New Pacific for services rendered and expenses incurred on behalf of New Pacific. The costs recovered from New Pacific were recorded as a direct reduction of general and administrative expenses on the consolidated statements of income.

(b)	Henan Non-ferrous Geology Bureau (“Henan Geology Bureau”) is a 22.5% equity interest holder of Henan Found. During the three and six months ended September 30, 2012, Henan Found paid dividends of $7,073 (for the three and six months ended September 30, 2011 $nil) to Henan Geology Bureau.

(c)	For the three and six months ended September 30, 2012, the Company paid $101 and $194, respectively (for the three and six months ended September 30, 2011 $57 and $154, respectively) to McBrighton Consulting Ltd., a private company controlled by a director of the Company for consulting services. These amounts were included in salaries for key management personnel in (h).

(d)	For the three and six months ended September 30, 2012, the Company paid $152 and $300, respectively (for the three and six months ended September 30, 2011 $128 and $171, respectively) to R. Feng Consulting Ltd., a private company controlled by a director of the Company for consulting services. These amounts were included in salaries for key management personnel in (h).

(e)	Z.X. Zhu is the 30% non-controlling interest shareholder of Yunxiang.

(f)	The Company rents an office space (6,700 square feet) in Beijing from a relative of a director and officer of the Company for $12 (RMB 74,712) per month. During the three and six months ended September 30, 2012, total rents were $36 and $72, respectively (for the three and six months ended September 30, 2011 $36 and $72, respectively).

(g)	Henan Xinhui Mining Co., Ltd. (“Henan Xinhui”) is a 20% equity interest holder of Henan Huawei. During the three and six months ended September 30, 2012, Henan Huawei paid dividends of $315 (for the three and six months ended September 30, 2011 $nil) to Henan Xinhui.

The balances with related parties are unsecured, non-interest bearing, and due on demand.


(h)	Compensation of key management personnel

The remuneration of directors and other members of key management personnel for the three months ended September 30, 2012 and 2011 were as follows:


	Three months ended September 30,					Six months ended September 30,
		2012		2011		2012		2011
Directors' fees	$	61	$	128	$	120	$	174
Salaries for key management personnel		879		1,140		1,289		1,505
Stock-based compensation		571		836		1,132		2,011
	$	1,511	$	2,104	$	2,541	$	3,690

Salaries of key management personnel include consulting and management fees disclosed in (c) & (d) above. Stock-based compensation expenses were measured at grant date fair value.


9.	Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the amounts reported on the consolidated financial statements. These 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. The Company’s critical accounting policies and estimates are described in Note 2 of the unaudited consolidated financial statements as of and ended September 30, 2012, as well as the audited consolidated financial statements as of and ended March 31, 2012.


	Management’s Discussion and Analysis	Page 22


SILVERCORP METALS INC.
Management’s Discussion and Analysis
For the Three and Six Months Ended September 30, 2012
(Expressed in thousands of U.S. dollars, unless otherwise stated)


(i)	Ore reserve and mineral resource estimates

Ore reserves are estimates of the amount of ore that can be economically and legally extracted from the Company’s mining properties. The Company estimates its ore reserves and mineral resources based on information compiled by appropriately qualified persons relating to the geological and technical data on the size, depth, shape and grade of the ore body and suitable production techniques and recovery rates. Such an analysis requires complex geological judgements to interpret the data. The estimation of recoverable reserves is based upon factors such as estimates of foreign exchange rates, commodity prices, future capital requirements, and production costs along with geological assumptions and judgements made in estimating the size and grade of the ore body.

The Company estimates ore reserves in accordance with National Instrument 43-101, “Standards of Disclosure for Mineral Projects”, issued by the Canadian Securities Administrators. There are numerous assumptions including:

-	Future production estimates – which include proved and probable reserves, resource estimates and committed expansions;
-	Expected future commodity prices, based on current market price, forward prices and the Company’s assessment of the long-term average price; and
-	Future cash costs of production, capital expenditure and rehabilitation obligations.

As the economic assumptions used may change and as additional geological information is produced during the operation of a mine, estimates of reserves may change. Such changes may impact the Company’s reported financial position and results which include:

-	The carrying value of mineral rights and properties and plant and equipment may be affected due to changes in estimated future cash flows;
-	Depreciation and depletion charges in net income may change where such charges are determined using the units of production method, or where the useful life of the related assets change; and
-	The recognition and carrying value of deferred income tax assets may change due to changes in the judgements regarding the existence of such assets and in estimates of the likely recovery of such assets.


(ii)	Impairment of assets

Where an indicator of impairment exists, a formal estimate of the recoverable amount is made, which is considered to be the higher of the fair value less costs to sell and value in use. These assessments require the use of estimates and assumptions such as long-term commodity prices (considering current and historical prices, price trends and related factors), discount rates, operating costs, future capital requirements, closure and rehabilitation costs, exploration potential, reserves and operating performance (which includes production and sales volumes). These estimates and assumptions are subject to risk and uncertainty. Therefore, there is a possibility that changes in circumstances will impact these projections, which may impact the recoverable amount of assets and/or cash generating units. Fair value is determined as the amount that would be obtained from the sale of the asset in an arm’s length transaction between knowledgeable and willing parties. Fair value for mineral assets is generally determined as the present value of estimated future cash flows arising from the continued use of the asset, which includes estimates such as the cost of future expansion plans and eventual disposal, using assumptions that an independent market participant may take into account. Cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.


	Management’s Discussion and Analysis	Page 23

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Three and Six Months Ended September 30, 2012

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


10.	Future Accounting Changes

IAS 1 – Presentation of Financial Statements amendment issued by the IASB in June 2011 provides improved consistency and clarity of the presentation of items of other comprehensive income. The main change was a requirement to group items presented in other comprehensive income on the basis of whether they are potentially reclassifiable to profit or loss subsequently. This amendment is effective for annual periods beginning on or after July 1, 2012, with earlier application permitted. The Company does not anticipate this amendment to have a significant impact on the consolidated financial statements.

IFRS 10 – Consolidated Financial Statements supersedes SIC 12 – Consolidation – Special Purpose Entities and the requirements relating to consolidated financial statements in IAS 27 – Consolidated and Separate Financial Statements. IFRS 10 establishes the principle and application of control as the basis for an investor to identify whether an investor controls an investee and thereby requiring consolidation. This standard is effective for annual periods beginning on or after January 1, 2013, with earlier application permitted.

IFRS 12 – Disclosure of Interests in Other Entities requires the disclosure of information that enables users of financial statements to evaluate the nature of, and risks associated with, its interests in other entities and the effects of those interests on its financial position, financial performance and cash flows. This standard is effective for annual periods beginning on or after January 1, 2013, with earlier application permitted.

The Company is still in the process of assessing the impact of the application of IFRS 10 and IFRS 12 on the consolidated financial statements.

IFRS 11 – Joint Arrangements establishes the principle a joint arrangement are classified as joint operations or joint ventures based on the rights and obligations of the parties to the joint arrangement, rather than its legal form. This standard is effective for annual periods beginning on or after January 1, 2013, with earlier application permitted.

IAS 28 – Investments in Associates and Joint Ventures prescribes the accounting for investments in associates and sets out the requirements for the application of the equity method for investments in associates and joint ventures. This standard is effective for annual periods beginning on or after January 1, 2013, with earlier application permitted.

The Company is still in the process of assessing the impact of the application of IFRS 11 and IAS 28 on the consolidated financial statements.


11.	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, 2012.


	Management’s Discussion and Analysis	Page 24

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Three and Six Months Ended September 30, 2012

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


12.	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 – 170,755,058 common shares with a recorded value of $233.0 million

Shares subject to escrow or pooling agreements $nil.


(b)	Options

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


Number of Options	Exercise Price (CAD$)	Expiry Date
13,700	9.05	January 16, 2013
25,000	7.54	May 13, 2013
197,500	5.99	July 1, 2013
60,000	3.05	October 1, 2013
548,001	2.65	April 19, 2014
355,500	7.00	January 5, 2015
178,250	7.40	April 20, 2015
336,437	8.23	October 3, 2015
208,781	12.16	January 4, 2016
193,500	14.96	April 7, 2016
265,000	9.20	June 4, 2016
306,000	7.27	November 24, 2016
451,000	6.69	March 5, 2017
307,000	6.53	June 17, 2017
410,000	5.35	August 8, 2017
3,855,669


(c)	Warrants

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


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


13.	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 institutions; 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 Statements; and Management’s Discussion and Analysis for the year ended March 31, 2012. 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’s Discussion and Analysis	Page 25

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Three and Six Months Ended September 30, 2012

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

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.


14.	Disclosure Controls and Procedures

Disclosure controls and procedures are designed to provide reasonable assurance that material information is gathered and reported to senior management, including the CEO and CFO, as appropriate to allow for timely decision about public disclosure.

Management, including the CEO and CFO, has evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as at September 30, 2012, as defined in the rules of the U.S. Securities and Exchange Commission and Canadian Securities Administration. Based on this evaluation, management concluded that the disclosure controls and procedures are effective in providing reasonable assurance that the information required to be disclosed in reports we filed or submitted under United States and Canadian securities legislation was recorded, processed, summarized and reported within the time periods specified in those rules.


15.	Changes in Internal Control over Financial Reporting

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


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	Myles J. Gao, Director, President

Yikang Liu, Director	Maria Tang, Chief Financial Officer

Earl Drake, Director	Shaoyang Shen, Chief Operating Officer

Paul Simpson, Director	Peter Torn, Corporate Secretary & General Counsel

David Kong, Director

Robert Gayton, Director

Myles Gao, P.Geo., President of Silvercorp, is a Qualified Person for Silvercorp under NI 43-101 and has reviewed and given consent to the technical information contained in this MD&A.

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 actions, 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	Page 26

SILVERCORP METALS INC.

Management’s Discussion and Analysis

For the Three and Six Months Ended September 30, 2012

(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 licenses;

First Nations title claims and rights;

operations and political conditions;

regulatory environment in China and Canada;

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 Page 27

EX-99.4 5 exhibit99-4.htm FORM 52-109F2 CERTIFICATION OF INTERIM FILINGS - CFO Exhibit 99.4

Exhibit 99.4

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

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

1.
Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Silvercorp Metals Inc. (the “issuer”) for the interim period ended September 30, 2012.

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 report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance 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 July 1, 2012 and ended on September 30, 2012 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

Date: November 13, 2012

“Maria Tang”

Meng (Maria) Tang

Chief Financial Officer

EX-99.5 6 exhibit99-5.htm FORM 52-109F2 CERTIFICATION OF INTERIM FILINGS - CEO Exhibit 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 report and interim MD&A (together, the “interim filings”) of Silvercorp Metals Inc. (the “issuer”) for the interim period ended September 30, 2012.

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 report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance 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 July 1, 2012 and ended on September 30, 2012 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

Date: November 13, 2012

“Rui Feng”

Rui Feng

Chief Executive Officer

EX-99.6 7 exhibit99-6.htm NEWS RELEASE DATED NOVEMBER 13, 2012 Exhibit 99.6

Exhibit 99.6

NEWS RELEASE

Trading Symbol: TSX: SVM

NYSE: SVM

SILVERCORP ANNOUNCES DIVIDEND OF CAD$0.025

VANCOUVER, British Columbia – November 13, 2012 – Silvercorp Metals Inc. (“Silvercorp” or the “Company”) today announced that its Board of Directors has declared a quarterly dividend of CAD$0.025 per share to be paid on or before January 21, 2013 to shareholders of record at the close of business on December 31, 2012. The dividends are considered eligible dividends for Canadian tax purposes.

About Silvercorp

Silvercorp is a low-cost silver-producing Canadian mining company with multiple mines in China which has paid a cash dividend since 2007. The Company is currently developing the GC project in southern China which it expects will become its next operating mine in early 2013. The Company’s vision is to deliver shareholder value by focusing on the acquisition of small-scale projects with resource potential and self-fund the growth of those assets. For more information, please visit our website at www.silvercorp.ca.

Investor contact

Jonathan Hackshaw
Director, Investor Relations

Phone: (604) 669-9397
Toll Free 1(888) 224-1881
Email: investor@silvercorp.ca
Website: www.silvercorp.ca

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99.1	News Release- November 13, 2012 Silvercorp Reports Financial And Operating Results For The Second Quarter Of Fiscal 2013

99.2	Silvercorp Metals Inc. Financial Statements For The 2^ndQuarter Ended September 30, 2012

99.3	Silvercorp Metals Inc. MD&A For The 2^ndQuarter Ended September 30, 2012

99.4	Form 52-109F2 Certificate Of Interim Filings- Full Certificate- CFO

99.5	Form 52-109F2 Certificate Of Interim Filings- Full Certificate- CEO

99.6	News Release- November 13, 2012 Silvercorp Announces Dividend Of CAD$0.025


Dated: November 13, 2012		SILVERCORP METALS INC.

	/s/ Maria Tang
	Maria Tang
	Chief Financial Officer


	Management’s Discussion and Analysis	Page 27

1.	*Review:* I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Silvercorp Metals Inc. (the “issuer”) for the interim period ended September 30, 2012.

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 report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance 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

	(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 July 1, 2012 and ended on September 30, 2012 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.


EXHIBIT	DESCRIPTION OF EXHIBIT