Silvercorp Announces its Financial and Operating Results for the 3rd Quarter Ended December 31, 2008

VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 02/12/09 -- Silvercorp Metals Inc. (TSX: SVM) (the "Company") reports the unaudited financial and operating results for the third quarter ended December 31, 2008. The financial results in the following text are expressed in US dollars (US$) unless stated otherwise.

THIRD QUARTER HIGHLIGHTS

- Earnings, before non-cash impairment charges and unrealized foreign exchange loss relating to future income tax liability arising from the acquisition of the GC&SMT projects, of $2.6 million or $0.02 per share

- Silver head grades at the Ying mine for the quarter improved 27% to 420 g/t from 331 g/t in the previous quarter ended September 30, 2008

- Cash mining costs per tonne of ore at the Ying mine for the quarter declined 19% to $45.10 from $55.71 in the previous quarter ended September 30, 2008

- 36% increase in silver resources in the Measured and Indicated categories to 80.8 million ounces

- Completion of a 10,083-meter diamond drill program at the GC project in Guangdong resulting in the discovery of 15 new veins with high-grade silver mineralization

- Achievement of key milestones on the GC mining permit application

- Cash flow from operations of $8.5 million

- Cash, cash equivalents and short term investments of $43.3 million and no debt

FINANCIAL HIGHLIGHTS

Silvercorp reported a net loss for the quarter of $33.7 million, or $0.22 per share, compared to a net income of $17.8 million, or $0.12 per share, for the same period last year. On December 30, 2008, the Company announced the suspension of mining operations at the TLP and HPG mines, the scale down of mine production at the LM mine, and the suspension of its exploration program at the Nabao Project. As a result, non-cash impairment charges of $47.4 million ($40.3 million after tax) were recorded for the quarter. In addition, the Company recorded an unrealized foreign exchange loss relating to the translation from Chinese Yuan to the Canadian dollar for a future income tax liability arising from the acquisition of the GC & SMT projects. Excluding these two exceptional items, adjusted earnings for the quarter were $2.6 million, or $0.02 per share.

Condensed unaudited statements of operations for the three and nine months ended December 31, 2008 and 2007 are as follows:

                            Three months ended           Nine months ended
                                   December 31                 December 31
                         2008     2008    2007    2008     2008       2007
                     ------------------------- ---------------------------
                        Exclu-                   Exclu-
(USD $000s,              ding                     ding
 except per            except-                  except-
 share numbers)         ional                    ional
                      items(i)                 items(i)
Sales                $ 15,168   15,168  30,091  66,130   66,130  $  81,518
Gross profit            5,239    5,239  24,209  36,826   36,826     64,811
Accretion of assets
 retirement
 obligations              (27)     (27)    (14)    (87)     (87)       (44)
Amortization             (353)    (353)   (139)   (794)    (794)      (342)
Foreign exchange
 gain (loss)(i)         1,693     (830)    (58)  5,695    2,199     (1,120)
General exploration      (196)    (196)   (228) (1,825)  (1,824)      (778)
Impairment charges          -  (47,433)      -       -  (47,800)         -
General
 administration        (2,688)  (2,688) (2,574) (9,096)  (9,096)    (5,736)
Other income and
 expenses                (240)    (240)  2,142    (558)    (558)     6,146
                     ------------------------- ---------------------------
Income (loss) before
 income taxes and non-
 controlling interest   3,428  (46,528) 23,338  30,161  (21,134)    62,937
Income tax (expense)
 recovery(i)             (706)   6,434      39  (3,723)   3,417      1,406
Non-controlling
 interest(i)             (121)   6,400  (5,596) (6,039)     482    (15,265)
                     ------------------------- ---------------------------
Net income (loss)    $  2,601  (33,694) 17,781  20,399  (17,235) $  49,078
                     ------------------------- ---------------------------
                     ------------------------- ---------------------------
Earnings (loss) per
 share               $   0.02    (0.22)   0.12    0.13    (0.11) $    0.33

(i) exceptional items include non-cash impairment charges and unrealized
    foreign exchange loss relating to the translation from Chinese Yuan to
    Canadian dollars for future income tax liability arising from the
    acquisition of the GC & SMT projects.

For the three months ended December 31, 2008, the Company achieved sales of $15.2 million, a decline of 50% compared to sales of $30.1 million for the same period last year. Gross profit from operations amounted to $5.2 million, a decrease of 78% compared to $24.2 million for the three months ended December 31, 2007, representing a gross margin of 35% (three months ended December 31, 2007 - 80%).

For the nine months ended December 31, 2008, the Company achieved sales of $66.1 million, down 19% from sales of $81.5 million for the same period last year. Gross profit from operations amounted to $36.8 million, a decrease of 43% compared to the $64.8 million for the nine months ended December 31, 2007, representing a gross margin of 56% (nine months ended December 31, 2007 - 80%).

Cash provided by operating activities for the three months ended December 31, 2008, was $8.5 million, a decrease of 63% from $23.1 million for the same period last year.

Cash provided by operating activities for the nine months ended December 31, 2008, was $36.4 million, a decrease of 42% from $62.6 million for the same period last year.

For the three months ended December 31, 2008, the Company achieved 38% higher production levels in terms of the tonnes of ore mined over the same period last year. However, sales, earnings and cash provided by operating activities decreased, mainly due to the following:

(i) during the quarter, the Net Smelter Return (NSR) for silver, lead and zinc decreased by 39%, 49% and 32%, respectively, compared to the previous quarter, and by 34%, 60% and 60%, respectively, compared to the same quarter last year. During the nine months ended December 31, 2008, the NSR for silver, lead and zinc dropped by 1%, 27% and 55%, respectively, compared to the same period last year; and

(ii) a total of $47.4 million ($40.3 million after tax) in impairment charges and a $2.5 million unrealized foreign exchange loss relating to the translation from Chinese Yuan to the Canadian dollar for a future income tax liability arising from the acquisition of the GC & SMT projects were recorded in the current quarter while $nil was recorded in the same quarter last year.

The Company ended the quarter with $43.3 million in cash and cash equivalents and short-term investments, after making dividend payments of $3.0 million to shareholders and $3.6 million in capital expenditures.

Capital expenditures during the nine months ended December 31, 2008, amounted to $47.6 million (nine months ended December 31, 2007 - $29.8 million), representing the purchase of mineral rights and properties and deferred exploration costs totaling $36.4 million (nine months ended December 31, 2007 - $26.4 million) and the purchase of equipment and construction of a new mill totaling $11.2 million (nine months ended December 31, 2007 - $3.4 million).

OPERATIONS HIGHLIGHTS

Total sales and selling prices (NSR, net of smelter charges and the value added tax) for the three months ended December 31, 2008, compared to the same period of last year, are as follows:


                          Three months ended December 31
          -----------------------------------------------------------------
                     Quantity         Metal Prices          Sales Revenue
                  2008      2007      2008      2007         2008      2007
           ---------------------  ------------------  ---------------------
Silver
 (ounces)          1.1       1.1  $   7.34  $  11.09         $8.0     $12.1
               million   million                          million   million
Gold
 (ounces)          601       853    449.52    664.33          0.3       0.6
                                                          million   million
Lead
 (pounds)         14.8      13.8      0.41      1.02          6.1      14.0
               million   million                          million   million
Zinc
 (pounds)          3.0       4.9      0.28      0.70          0.8       3.4
               million   million                          million   million
           ----------------------------------------------------------------

For the three months ended December 31, 2008, 121,946 tonnes of ore were mined, representing a 38% increase compared to the same period last year. Of this amount, 3,288 tonnes were hand sorted for direct shipment to smelters and the remaining 118,658 tonnes were shipped to mills for processing. A total of 115,227 tonnes of ore were treated in Silvercorp's mills to produce silver-lead and zinc concentrates.

For the nine months ended December 31, 2008, 376,099 tonnes of ore were mined, representing a 61% increase compared to the same period last year. Of this amount, 5,994 tonnes were hand sorted for direct shipment to smelters and 370,106 tonnes of ores were shipped to mills for processing. A total of 366,944 tonnes of ore were treated in mills to recover silver-lead and zinc concentrates.

For the three months ended December 31, 2008, the cash unit mining cost per tonne of ore decreased by 8% to $42.57, compared to a cash unit mining cost of $46.49 in the same quarter last year. On a sequential basis, the cash mining cost per tonne of ore decreased by 19% to $42.57 in the current quarter from $52.33 in the quarter ended September 30, 2008, as a result of operational improvements.

For the three months ended December 31, 2008, the total mining cost per tonne of ore mined increased by 19% to $64.30 per tonne compared to $53.92 per tonne in the same period last year. The total mining cost is comprised of a cash unit mining cost of $42.57 per tonne (same period last year - $46.49 per tonne) and a non-cash unit mining cost of $21.73 per tonne (same period last year - $7.43 per tonne).

The Company continues to achieve industry-leading low total production costs per ounce of silver. For the three months ended December 31, 2008, the total production cost per ounce of silver and total cash cost per ounce of silver adjusted for by-product credits were $2.54 (same period last year - negative $11.18) and $0.25 (same period last year - negative $12.10), respectively. This increase was mainly caused by the reduction in by-product credits as the average selling price of lead fell 60% from $1.02 to $0.41 per pound and the average selling price of zinc fell 60% from $0.70 to $0.28 per pound compared to same quarter last year.

Ying Mine

The following table lists the grade changes over the last five quarters at the Ying Mine:


                         -------------------------------------------------
                           Q3 2009   Q2 2009   Q1 2009   Q4 2008   Q3 2008
                         31-Dec-08 30-Sep-08 30-Jun-08 31-Mar-08 31-Dec-07
--------------------------------------------------------------------------
Run of Mine Ores (tonne)
 Direct Smelting Ores
  (tonne)                    3,114     2,387     3,071     2,673     3,210
 Ores Milled (tonne)        70,854    69,493    74,691    51,996    64,635
                         -------------------------------------------------
                            73,968    71,880    77,762    54,669    67,845
                         -------------------------------------------------
Head Grades of Run of
 Mine Ores
 Silver (gram/tonne)         420.2     331.2     396.0     488.9     461.7
 Lead (%)                      7.7       6.0       6.7       8.1       7.5
 Zinc (%)                      2.6       2.5       3.3       3.8       3.6
--------------------------------------------------------------------------

Compared with the quarter ended September 30, 2008, head grades improved as a result of operational improvements. During this quarter, the Company enhanced its quality control procedures and applied a more systematic approach in monitoring daily production and the management of mining contractors.

HPG Mine

The following table lists the grade changes over the last five quarters at the HPG Mine:


                         -------------------------------------------------
                           Q3 2009   Q2 2009   Q1 2009   Q4 2008   Q3 2008
                         31-Dec-08 30-Sep-08 30-Jun-08 31-Mar-08 31-Dec-07
--------------------------------------------------------------------------
Run of Mine Ores (tonne)
 Direct Smelting Ores
  (tonne)                      162       135       193       496       481
 Ores Milled (tonne)        23,692    19,233    13,163    12,645    16,434
                         -------------------------------------------------
                            23,854    19,368    13,356    13,141    16,915
                         -------------------------------------------------
Head Grades of Run of
 Mine Ores
 Silver (gram/tonne)         108.8     134.6     248.3     198.9     217.3
 Lead (%)                      4.6       4.2       9.7       7.9       6.5
 Zinc (%)                      1.2       0.9       0.6       1.1       0.7
--------------------------------------------------------------------------

LM Mine

The LM Mine was in its third quarter of test production. The following table lists the grade changes over the last three quarters:


                                          For the Quarters Ended
                                   -----------------------------
                                     Q3 2009   Q2 2009   Q1 2009
                                   31-Dec-08 30-Sep-08 30-Jun-08
----------------------------------------------------------------
Run of Mine Ores (tonne)
 Direct Smelting Ores (tonne)              4        15        71
 Ores Milled (tonne)                  10,118     8,441    11,516
                                   -----------------------------
                                      10,122     8,456    11,587
                                   -----------------------------
Head Grades of Run of Mine Ores
 Silver (gram/tonne)                   307.3     309.7     305.4
 Lead (%)                                1.9       2.4       2.0
----------------------------------------------------------------

TLP Mine

The TLP Mine was in its third quarter of test production. The following table lists the grade changes over the last three quarters:


                                          For the Quarters Ended
                                   -----------------------------
                                     Q3 2009   Q2 2009   Q1 2009
                                   31-Dec-08 30-Sep-08 30-Jun-08
                                   -----------------------------
Run of Mine Ores (tonne)
 Direct Smelting Ores (tonne)              8        34        53
 Ores Milled (tonne)                  10,563    28,532    23,404
                                   -----------------------------
                                      10,571    28,566    23,457
                                   -----------------------------
Head Grades of Run of Mine Ores
 Silver (gram/tonne)                   181.4     140.3     183.0
 Lead (%)                                2.8       2.0       2.7
----------------------------------------------------------------

OUTLOOK

In light of reduced global commodity prices, the Company has adjusted its China operations strategies in order to preserve cash and maintain positive operating cash flows. Mining operations at the TLP and HPG mines were suspended in late December 2008 while mining capacity in the LM Mine has been scaled down from approximately 150 tonnes per day to 100 tonnes per day with mining activities focusing on higher grade zones.

At the Ying mine -- which has accounted for 79% of sales in the year to date -- mining, development and exploration are proceeding as planned with production being maintained at 700-750 tonnes of ore per day. Production at the mine is forecast to be 260,000 tonnes of ore for fiscal 2010. Projected head grades, recovery rates and metal production for the Ying mine are listed in the table below:


-------------------------------------------------------------------------
Ying Mine Production Forecast
Fiscal 2010 (Ending March 31, 2010)
-------------------------------------------------------------------------
Ore mined/milled   Commodity   Grade   Recoveries   Projected metal sales
-------------------------------------------------------------------------
                   Silver     480g/t           91%        3.65 Million oz
                   ------------------------------------------------------
260,000 Tonnes     Lead            9%          95%         49 Million lbs
                   ------------------------------------------------------
                   Zinc            3%          72%         12 Million lbs
-------------------------------------------------------------------------

Meanwhile, the Company will focus on mine development at the TLP, LM and HPG mines in preparation for reviving production once metal prices improve. By-production ore from mine development at the TLP, LM and HPG mines are expected to yield approximately 0.4 million ounces of silver to bring the total silver production from the Ying Mining Camp to around 4.05 million ounces in fiscal 2010.

Using metal prices in mid-January 2009 and the above production projections, the Company's mining operations are projected to operate with a gross profit margin of between 55% and 65%, resulting in expected cash flows from operations of $30 million to $35 million. Capital expenditures for fiscal 2010 are budgeted at $16 million for the Ying Mining Camp, including $11 million for the Ying Mine and $5 million for the TLP, LM and HPG mines.

For the GC project in the southern Chinese province of Guangdong, a Phase II 3,000-meter diamond drill program will commence in March 2009 with a resource estimate update expected in June 2009. The Company plans to complete an Environmental Assessment Study of the project by the end of March 2009 after which a mining permit application will be submitted to the Ministry of Land and Resources of China in Beijing. The Company has budgeted approximately $4 million for the GC project in fiscal 2010 for exploration and the permitting process. This brings the Company's overall capital expenditures budget for fiscal 2010 to $20 million.

The Company's Audited Annual and Unaudited Interim Consolidated Financial Statements and Management's Discussion and Analysis are available for review on the corporate website at www.silvercorp.ca and through SEDAR at www.sedar.com.

Selected unaudited interim consolidated results for the three and nine months ended December 31, 2008 (Canadian GAAP) are attached to this news release.

CONFERENCE CALL AND WEBCAST INFORMATION

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

Date: Friday, February 13, 2009

Time: 9:00 am PST (12:00 pm EST)

Dial-In Number: 1-612-332-0107

Live audio webcast: www.silvercorp.ca (click on the link on the home page)

Playback webcast can be accessed at: www.silvercorp.ca

About Silvercorp Metals Inc.

Silvercorp Metals Inc., China's largest primary silver producer, is engaged in the acquisition, exploration and development of silver related mineral properties located in the People's Republic of China ("China"). Silvercorp Metals Inc. is operating and developing four Silver-Lead-Zinc mines at the highly profitable Ying Mining Camp, Henan Province, China. Silvercorp is also applying for a mining permit at the newly acquired, 95% owned, GC&SMT property to profitably mine and produce silver, lead and zinc in Guangdong Province, China. The Company's common shares are included as a component of the S&P/TSX Composite and the S&P/TSX Global Mining Indexes.

CAUTIONARY DISCLAIMER -- FORWARD LOOKING STATEMENTS

Statements in this press release other than purely historical factual information, including statements relating to mineral resources and reserves, or the Company's future plans and objectives, or expected production levels, head grades, recovery rates, cash flows, and capital expenditures constitute forward-looking statements. Forward-looking statements are based on numerous assumptions and are subject to all of the risks and uncertainties inherent in the Company's business, including risks inherent in mineral exploration, development, and mining. Production and revenue projections are based not on mineral reserves but on mineral resources which do not have demonstrated economic viability. There can be no assurance that such forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. This press release should be read in conjunction with the Company's Management Discussion and Analysis and the Company's unaudited interim consolidated financial statements for the three and nine months ended December 31, 2008. Accordingly, readers should not place undue reliance on such statements. Except in accordance with applicable securities laws, the Company expressly disclaims any obligation to update any forward-looking statements or forward-looking statements that are incorporated by reference herein. We seek safe harbour.


SILVERCORP METALS INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited - Expressed in US Dollars)

                                Notes  December 31, 2008    March 31, 2008
--------------------------------------------------------------------------

ASSETS

Current Assets
 Cash and cash equivalents                $   28,807,706    $   47,092,890
 Short term investments                       14,507,243        37,145,656
 Accounts receivable and
  prepaids                                     3,272,043         5,259,699
 Inventories                      3&8          4,467,469         2,389,175
--------------------------------------------------------------------------
                                              51,054,461        91,887,420

Long term prepaids                  8          2,077,250         5,194,431
Long term investments               4         15,012,460        17,873,887
Property, plant and equipment     5&8         27,157,876        14,349,572
Mineral rights and properties     6&8         89,489,700        60,904,275
Reclamation deposits                               8,166             9,729
Future income tax assets                       1,960,315                 -
--------------------------------------------------------------------------
                                          $  186,760,228    $  190,219,314
--------------------------------------------------------------------------
--------------------------------------------------------------------------

LIABILITIES

Current Liabilities
 Accounts payable and
  accrued liabilities                     $   10,210,253    $    7,026,628
 Deposits received from customers              1,022,113         2,573,202
 Dividends payable                             2,475,698                 -
 Income tax payable                              663,568           719,557
 Amounts due to related parties    12          2,803,994        12,070,732
--------------------------------------------------------------------------
                                              17,175,626        22,390,119

Future income tax liabilities       6         19,734,004         6,345,898
Asset retirement obligation         7          2,135,454         1,225,829
--------------------------------------------------------------------------
                                              39,045,084        29,961,846

Non-controlling interests           9         11,945,831        11,265,197

SHAREHOLDERS' EQUITY

Share capital                      10        112,968,955        78,334,543
Contributed surplus                            3,657,611         1,722,036
Reserves                           11         11,059,771         2,077,628
Accumulated other comprehensive
 income (Loss)                                (5,428,199)       14,121,627
Retained earnings                             13,511,175        52,736,437
--------------------------------------------------------------------------
                                             135,769,313       148,992,271
--------------------------------------------------------------------------

                                          $  186,760,228    $  190,219,314
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Commitments                   4, 6&16

Approved on behalf of the Board:


(Signed) Robert Gayton
-------------------------------
Director

(Signed) Rui Feng
-------------------------------
Director

The accompanying notes are an integral part of these unaudited interim
consolidated financial statements.


SILVERCORP METALS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited - expressed in US Dollars except for share figures)

                          Three months ended             Nine months ended
                                 December 31,                  December 31,
                ----------------------------------------------------------
          Notes           2008          2007           2008           2007
--------------------------------------------------------------------------

Sales           $   15,167,797  $ 30,090,695  $  66,130,673  $  81,518,183
--------------------------------------------------------------------------

Cost of sales        7,439,333     4,889,057     23,046,247     13,655,741
Amortization
 and depletion       2,489,048       992,436      6,258,501      3,051,395
--------------------------------------------------------------------------
                     9,928,381     5,881,493     29,304,748     16,707,136
--------------------------------------------------------------------------

Gross profit         5,239,416    24,209,202     36,825,925     64,811,047
--------------------------------------------------------------------------

Expenses
 Accretion of
  asset
  retirement
  obligations 7         26,690        14,349         87,254         44,257
 Amortization          353,483       139,495        793,575        342,060
 Foreign
  exchange
  loss (gain)          830,196        57,198     (2,199,342)     1,119,563
 General
  exploration
  and property
  investigation
  expenses             195,687       228,127      1,825,218        778,604
 Impairment
  charges     8     47,433,476             -     47,800,181              -
 Investor
  relations             87,158        81,953        441,031        214,543
 Office,
  administration
  and
  miscellaneous      2,415,896     2,015,761      7,296,364      4,844,211
 Professional
  fees                 184,978       476,041      1,358,497        676,986
--------------------------------------------------------------------------
                    51,527,564     3,012,924     57,402,778      8,020,224
--------------------------------------------------------------------------
Earnings
 (loss)
 before other
 income and
 expenses          (46,288,148)   21,196,278    (20,576,853)    56,790,823
Other
 income and
 expenses
 Equity
  loss in
  investment  4        (22,398)      (68,035)    (1,466,735)      (171,630)
 Loss on
  disposal of
  mineral
  rights and
  property    6       (819,213)            -       (819,213)             -
 Loss on
  disposal
  of property,
  plant and
  equipment   5        (9,495)             -        (18,999)       (48,130)
 Interest
  income              246,095        803,075      1,266,197      1,892,004
 Other
  income              364,931      1,406,849        480,756      4,474,093
--------------------------------------------------------------------------
                     (240,080)     2,141,889       (557,994)     6,146,337

Income (loss)
 before
 income taxes
 and non-
 controlling
 interests        (46,528,228)    23,338,167    (21,134,847)    62,937,160

Income tax
 expense
 (recovery)
 Current              778,752        (43,164)     4,182,769     (1,546,714)
 Future       8    (7,212,369)         4,031     (7,600,080)       140,888
--------------------------------------------------------------------------
                   (6,433,617)       (39,133)    (3,417,311)    (1,405,826)

Income
 (loss)
 before
 non-
 controlling
 interests        (40,094,611)    23,377,300    (17,717,536)    64,342,986

Non-
 controlling
 interests    9     6,399,690     (5,596,340)       482,149    (15,264,994)
--------------------------------------------------------------------------

Net
 income
 (loss)         $ (33,694,921) $  17,780,960  $ (17,235,387) $  49,077,992
--------------------------------------------------------------------------
--------------------------------------------------------------------------

Basic
 earnings
 (loss) per
 share          $       (0.22) $        0.12  $       (0.11) $        0.33
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Diluted
 earnings
 (loss) per
 share          $       (0.22) $        0.12  $       (0.11) $        0.33
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Weighted
 Average
 Number of
 Shares
 Outstanding-
 Basic            151,689,501    148,088,464    151,760,854    147,237,094
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Weighted
 Average
 Number of
 Shares
 Outstanding-
 Diluted          151,689,501    150,933,410    151,760,854    150,565,280
--------------------------------------------------------------------------
--------------------------------------------------------------------------

The accompanying notes are an integral part of these unaudited interim
consolidated financial statements.


SILVERCORP METALS INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited - Expressed in US Dollars)

                          Three months ended             Nine months ended
                                 December 31,                  December 31,
                 ---------------------------------------------------------
                          2008          2007           2008           2007
--------------------------------------------------------------------------

Net income
 (loss) for
 the period      $ (33,694,921) $ 17,780,960  $ (17,235,387) $  49,077,992
Other
 comprehensive
 income (loss),
 net of taxes:
 Transition
  adjustment to
  opening balance
  upon adoption of
  new standards              -             -              -         10,000
 Unrealized loss
  on available for
  sale securities      (43,204)            -       (107,018)             -
 Unrealized
  exchange gain
  on translation of
  self-sustaining
  foreign
  operations         9,642,253        88,933     10,191,073      1,316,588
 Unrealized
  exchange gain
  (loss) on
  translation of
  functional
  currency to
  reporting
  currency         (23,342,658)    1,127,263    (29,633,881)    (3,882,787)
--------------------------------------------------------------------------
Other
 comprehensive
 income (loss)     (13,743,609)    1,216,196    (19,549,826)    (2,556,199)
--------------------------------------------------------------------------
Comprehensive
 income (loss)   $ (47,438,530) $ 18,997,156  $ (36,785,213) $  46,521,793
--------------------------------------------------------------------------
--------------------------------------------------------------------------

The accompanying notes are an integral part of these unaudited interim
consolidated financial statements.


SILVERCORP METALS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - Expressed in US Dollars)

                          Three months ended             Nine months ended
                                 December 31,                  December 31,
--------------------------------------------------------------------------
                          2008          2007           2008           2007
--------------------------------------------------------------------------
Cash provided
 by (used for)
Operating
 activities
 Net income
  (loss) for
  the period     $ (33,694,921) $ 17,780,960  $ (17,235,387) $  49,077,992
 Add (deduct)
  items not
  affecting cash:
  Accretion of
   asset retirement
   obligations          26,690        14,349         87,254         44,257
  Amortization       2,842,531     1,131,931      7,052,076      3,393,455
  Equity
   Investment
   loss (gain)          22,398        68,035      1,466,735        171,630
  Future income
   tax expenses
   (recovery)       (7,212,369)        4,031     (7,600,080)       140,888
  Impairment
   charges          47,433,476    (1,336,364)    47,800,181              -
  Loss on
   disposal of
   mineral
   property            819,213             -        819,213              -
  Loss on
   disposal of
   property, plant,
   and equipment         9,495             -         18,999         48,130
  Mineral
   property
   option income             -             -              -     (4,388,267)
  Non-controlling
   interests        (6,399,690)    5,596,340       (482,149)    15,264,994
  Stock-based
   compensation        727,482       750,687      1,995,629      1,878,054
  Unrealized
   foreign exchange
   loss on future
   income tax
   liabilities       2,523,023             -      3,495,171              -
--------------------------------------------------------------------------
                     7,097,328    24,009,969     37,417,642     65,631,133

 Net change
  in non-cash
  working capital
  Accounts
   receivable and
   prepaids          2,161,729     2,925,623      2,174,465     (1,596,359)
  Inventory           (113,148)     (137,646)    (2,532,188)       632,257
  Accounts payable
   and accrued
   liabilities        (621,539)   (2,430,917)       899,293        971,964
  Asset retirement
   obligation
   discharged
   upon payment              -      (149,692)             -       (513,831)
  Income tax payable   653,209       (44,975)       (61,055)    (1,611,566)
  Deposits
   received from
   customers          (668,778)   (1,040,242)    (1,537,741)      (958,133)
--------------------------------------------------------------------------
 Cash provided
  by operating
  activities         8,508,801    23,132,120     36,360,416     62,555,465
--------------------------------------------------------------------------

Investing
 activities
 Acquisition of
  mineral rights
  and properties      (995,888)  (21,307,510)   (36,401,652)   (26,371,128)
 Acquisition of
  property, plant,
  and equipment     (2,562,895)   (1,238,123)   (11,172,542)    (3,433,118)
 Purchase of
  long term
  investments         (145,408)   (1,974,348)      (145,408)    (3,903,772)
 Decrease
  (increase) of
  short term
  investments       (2,458,413)    3,291,627     22,395,700    (28,325,715)
 Decrease
  (increase) in
  long term
  prepaids          (2,428,912)      233,163     (1,853,071)    (3,763,724)
 Proceeds from
  disposal of
  mineral rights
  and properties       814,283             -        814,283              -
 Proceeds from
  disposal of
  property, plant,
  and equipment          1,745             -          1,745        157,352
 Distribution to
  non-controlling
  interest
  shareholder                -             -    (11,199,489)    (3,371,257)
 Cash dividends
  distributed       (2,990,467)   (6,891,019)    (2,990,467)    (6,891,019)
 Non-controlling
  interest
  contribution         215,003             -        215,003              -
--------------------------------------------------------------------------
 Cash used in
  investing
  activities       (10,550,952)  (27,886,210)   (40,335,898)   (75,902,381)
--------------------------------------------------------------------------

Financing
 activities
 Repayment from
  (advance to)
  related parties   (1,100,455)     (106,810)       188,368     (1,501,842)
 Advance
  (repayment)
  under loans
  payable                    -      (540,605)             -      1,688,814
 Share
  subscriptions
  for cash, net
  of commission
  and expenses               -             -         21,091      1,818,550
 Shares
  returned to
  treasury for
  cancellation        (420,742)      616,636     (9,472,891)             -
--------------------------------------------------------------------------
 Cash provided
  by (used in)
  financing
  activities        (1,521,197)      (30,779)    (9,263,432)     2,005,522
--------------------------------------------------------------------------

Effect of
 exchange rate
 changes on cash
 and cash
 equivalents        (4,122,641)    1,167,826     (5,046,270)     5,292,864

Decrease in
 cash and cash
 equivalents        (7,685,987)   (3,617,043)   (18,285,184)    (6,048,530)

Cash and cash
 equivalents,
 beginning of
 period             36,493,693    50,898,981     47,092,890     53,330,468
--------------------------------------------------------------------------

Cash and cash
 equivalents,
 end of period   $  28,807,706  $ 47,281,938  $  28,807,706  $  47,281,938
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Supplemental
 information:
 Interest
  paid           $           -  $     13,480  $      29,968  $      30,000
 Income
  tax paid       $           -  $          -  $   4,148,853  $           -

Non-cash
 investing
 activities:
 Common shares
  issued for
  mineral rights
  and properties $           -  $           -  $  36,484,591  $           -
 Common shares
  of New Pacific
  Metals Corp.
  received as
  partial
  consideration
  for the
  Option
  Agreement
  related to
  Kang Dian
  Project
          Note 9 $           -  $  1,336,364  $           -  $   4,388,267
 Capitalized
  future income
  tax on
  acquisiton
  of mineral
  rights and
  properties     $           -  $          -  $  19,220,433  $           -
 Capitalized
  asset
  retirement
  obligation
  as per
  initial
  measurement    $           -  $          -  $     726,460  $           -

The accompanying notes are an integral part of these unaudited interim
consolidated financial statements.


SILVERCORP METALS INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Unaudited - expressed in US Dollars except for share figures)

--------------------------------------------------------------------------
                                         Share capital
                                  --------------------------
                                    Number of                  Contributed
                           Notes       shares         Amount       surplus
--------------------------------------------------------------------------
Balance, March 31, 2007           145,957,938  $  74,336,151  $    954,041
Transition adjustment
 to opening balance                         -              -             -
Options exercised                   3,448,896      2,225,239             -
Warrants exercised                      9,750         68,463             -
Cancellation of
 fraction shares                         (108)             -             -
Value of options
 transferred upon exercised                 -      1,704,690    (1,704,690)
Stock based compensation                    -              -     2,472,685
Unrealized loss on
 available for sale securities              -              -             -
Appropriation to reserves                   -              -             -
Cash dividends declared
 and distributed                            -              -             -
Earnings of the year                        -              -             -
Unrealized gain on
 translation of
 self-sustaining operation                  -              -             -
Unrealized gain on translation
 functional currency to
 reporting currency                         -              -             -
--------------------------------------------------------------------------
Balance, March 31, 2008           149,416,476     78,334,543     1,722,036
Options exercised                       4,482         21,091             -
Shares issued for property          4,532,543     36,484,591             -
Cancellation of
 shares under normal
 course issuer bid          10(b)  (2,366,500)    (1,884,815)      (46,509)
Value of options
 transferred upon exercised                 -         13,545       (13,545)
Stock based compensation                    -              -     1,995,629
Unrealized loss on
 available for
 sale securities                            -              -             -
Appropriation to reserves     11            -              -             -
Cash dividends
 declared and distributed   10(e)           -              -             -
Loss of the period                          -              -             -
Unrealized gain on
 translation of
 self-sustaining operation                  -              -             -
Unrealized loss on translation
 functional currency to
 reporting currency                         -              -             -
--------------------------------------------------------------------------
Balance, Decembeer 31, 2008       151,587,001  $ 112,968,955  $  3,657,611
--------------------------------------------------------------------------
--------------------------------------------------------------------------


--------------------------------------------------------------------------
                                        Accumu-
                                         lated
                                         other
                                        compre-    Retained          Total
                                       hensive     earnings   shareholders'
                        Reserves  income (loss)    (deficit)        equity
--------------------------------------------------------------------------
Balance,
 March 31, 2007     $          - $     479,795 $  1,767,831  $  77,537,818
Transition
 adjustment to
 opening balance               -         8,674            -          8,674
Options exercised              -             -            -      2,225,239
Warrants exercised             -             -            -         68,463
Cancellation of
 fraction shares               -             -            -              -
Value of options
 transferred
 upon exercised                -             -            -              -
Stock based
 compensation                  -             -            -      2,472,685
Unrealized loss
 on available for
 sale securities               -       (48,643)           -        (48,643)
Appropriation
 to reserves           2,077,628             -   (2,077,628)             -
Cash dividends
 declared and
 distributed                   -             -   (6,891,020)    (6,891,020)
Earnings of the year           -             -   59,937,254     59,937,254
Unrealized gain
 on translation of
 self-sustaining
 operation                     -     3,972,486            -      3,972,486
Unrealized gain on
 translation
 functional currency
 to reporting currency         -     9,709,315            -      9,709,315
--------------------------------------------------------------------------
Balance,
 March 31, 2008        2,077,628    14,121,627   52,736,437    148,992,271
Options exercised              -             -            -         21,091
Shares issued
 for property                  -             -            -     36,484,591
Cancellation of
 shares under normal
 course issuer bid             -             -   (7,541,567)    (9,472,891)
Value of options
 transferred
 upon exercised                -             -            -              -
Stock based
 compensation                  -             -            -      1,995,629
Unrealized loss
 on available for
 sale securities               -      (107,018)           -       (107,018)
Appropriation
 to reserves           8,982,143             -   (8,982,143)             -
Cash dividends
 declared and
 distributed                   -             -   (5,466,165)    (5,466,165)
Loss of the period             -             -  (17,235,387)   (17,235,387)
Unrealized gain on
 translation of
 self-sustaining
 operation                     -    10,191,073            -     10,191,073
Unrealized loss on
 translation
 functional currency
 to reporting currency         -   (29,633,881)           -    (29,633,881)
--------------------------------------------------------------------------
Balance,
 Decembeer 31, 2008 $ 11,059,771 $  (5,428,199) $13,511,175  $ 135,769,313
--------------------------------------------------------------------------
--------------------------------------------------------------------------

The accompanying notes are an integral part of these unaudited interim
consolidated financial statements.

Contacts:
Silvercorp Metals Inc.
Rui Feng
Chairman & CEO
(604) 669-9397 or Toll Free: 1-888-224-1881

Silvercorp Metals Inc.
Lorne Waldman
Corporate Secretary
(604) 669-9397 or Toll Free: 1-888-224-1881
(604) 669-9387 (FAX)
Email: info@silvercorp.ca
Website: www.silvercorp.ca

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