Silvercorp makes takeover bid for gold developer OreCorp

Canadian mining company Silvercorp Metals has signed a binding scheme implementation deed to take over the fully paid ordinary shares of gold developer OreCorp, to create a diversified, high-growth precious metals company.

With a pro forma market cap of A$960m ($630m), the precious metals company will have exposure to a highly prospective emerging mining jurisdiction.

Under the deed, Silvercorp will acquire all fully paid ordinary shares of OreCorp that are not already held by it or its associates.

Shareholders of OreCorp will get A$0.15 in cash and be issued 0.0967 of Silvercorp common shares for every share held. This represents an implied value of A$0.60 for each OreCorp share.

Furthermore, Silvercorp has signed a placement agreement with OreCorp whereby the former would provide an equity placement of A$28m to OreCorp to advance the latter’s development of the Nyanzaga gold project in Mwanza, Tanzania.

Under the placement, OreCorp would issue 70.4 million shares to Silvercorp at a price of A$0.40 per OreCorp share.

Silvercorp said in a statement: “Proceeds from the placement will be used to immediately commence resettlement activities as contemplated in the relocation action plan, facilitating the prompt development of Nyanzaga.”

OreCorp owns an 84% stake in the Nyanzaga Gold Project, which is scheduled to start production in H2 2025.

Following completion of the placement, Silvercorp will own around 15% of the total outstanding ordinary shares in OreCorp.