Silvercorp is also disappointed that Klondex has issued 1,714,285 Klondex shares to China Mineral United Management Limited ("CMU") pursuant to a private placement announced on June 30, 2009 at an issue price of C$1.75 per share. Silvercorp is considering the implications of the above private placement in light of the fact that (i) Silvercorp's offer was conditional upon Klondex not issuing any shares; (ii) the private placement was completed at a discount of approximately 20% to Silvercorp's offer price; (iii) CMU was granted a two-year pre-emptive right to participate in up to 50% of certain future Klondex equity financings; and (iv) CMU was granted one of six seats on the Klondex board, while becoming a holder of only approximately 6% of Klondex's shares through the private placement purchase.