SYDNEY, AUSTRALIA: Silvercorp Metals Inc., a Canadian-based silver producer with operations in China, has announced that it has agreed to acquire OreCorp Limited, an Australian-based gold developer with a flagship project in Tanzania, for $65 million in cash and shares.
Under the terms of the agreement, Silvercorp will acquire all the OreCorp shares not held by Silvercorp or its associates, pursuant to an Australian scheme of arrangement. OreCorp shareholders will receive A$0.15 in cash and 0.0967 of a Silvercorp common share for each OreCorp share held, representing a total consideration of A$0.60 per OreCorp share.
The board of directors of OreCorp has unanimously recommended that OreCorp shareholders vote in favour of the scheme, subject to no superior proposal emerging and an independent expert concluding that the scheme is in the best interests of OreCorp shareholders.
Silvercorp will also provide OreCorp with approximately A$28 million in funding via an equity placement to immediately advance the development of its Nyanzaga gold project in Tanzania, which is expected to commence commercial production in the second half of 2025. Nyanzaga is a large-scale, high-grade gold project with a proven and probable reserve of 3.07 million ounces of gold at an average grade of 4.03 grams per tonne.
The acquisition aims to create a diversified, highly profitable precious metals company with a pro forma market cap of US$630 million, a robust growth pipeline and exposure to a highly prospective emerging mining jurisdiction. The combined company will have a portfolio of producing and development assets in China and Tanzania, with exposure to silver, gold, lead and zinc.
Silvercorp founder and CEO Dr. Rui Feng said the acquisition aligned with Silvercorp’s strategy of pursuing high-quality assets in attractive jurisdictions. “We are excited to partner with OreCorp and its experienced management team to develop Nyanzaga into a world-class gold mine. We believe this transaction will create significant value for both Silvercorp and OreCorp shareholders, as well as for the local communities and stakeholders in Tanzania,” he said.
OreCorp chairman Craig Williams said the acquisition represented an attractive outcome for OreCorp shareholders, who will receive a premium for their shares and retain exposure to the upside potential of Nyanzaga and Silvercorp’s assets. “We are pleased to join forces with Silvercorp, a leading silver producer with a strong balance sheet, technical expertise and operational excellence. We look forward to working together to unlock the full value of Nyanzaga and deliver on our vision of becoming a responsible gold producer in Tanzania,” he said.
The scheme is subject to various customary closing conditions, including OreCorp shareholder approval and court approval. Silvercorp has agreed to use reasonable endeavours to apply for admission to the official list of the Australian Securities Exchange. The parties expect that the scheme will be implemented by the end of November or early December 2023.
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