In a strategic move, Silvercorp Metals Inc., listed on both the TSX Venture Exchange and the New York Stock Exchange, and Australia’s ASX-listed OreCorp have collaboratively revised their initial agreement, significantly sweetening the deal for OreCorp shareholders.
Consequently, this revised agreement, amending the initial scheme implementation deed dated August 5, enhances the cash consideration from A$0.15 to A$0.19. Furthermore, the share consideration remains constant, with OreCorp shareholders receiving 0.0967 of a Silvercorp common share for each OreCorp share they hold.
This development marks a notable turn in the proposed acquisition of OreCorp by Silvercorp. Structured as an Australian scheme of arrangement, the deal involves Silvercorp acquiring all fully paid ordinary shares of OreCorp not already in its possession. Importantly, the transaction’s success hinges on meeting various conditions or waiving them as necessary.
Under the revised terms, the total value per OreCorp share now impressively stands at A$0.543. This figure represents a 24.9% premium over OreCorp’s closing share price of A$0.435 on the ASX as of August 4. Additionally, it also shows a 12% increase from the November 21 closing price of A$0.485.
Despite the enhanced cash offer, the core terms of the deal remain as initially outlined. Significantly, the OreCorp Board has unanimously backed the revised scheme, advocating shareholder approval barring any superior proposals. Their support continues, conditional on an independent expert affirming the deal’s favorability for OreCorp shareholders.
Moreover, OreCorp shareholders received the scheme booklet on November 8, with the scheme meeting scheduled for December 8. As an additional measure, a supplementary booklet, reflecting the updated offer, will soon be dispatched.
Silvercorp’s involvement in this deal stems from its robust financial position, which will crucially aid in funding the construction and exploration of the Nyanzaga gold project in Tanzania.
According to a report by Mining Weekly, the ongoing investment in the project includes a Silvercorp placement totaling A$28.2 million, primarily used for resettlement action plan compensation payments. Impressively, to date, these payments have reached approximately $7.3 million.
Efforts to integrate the two companies are actively underway, with Silvercorp’s senior executives meeting OreCorp’s management in Perth. This initiative follows the establishment of a joint integration committee.
Furthermore, the transaction recently gained significant momentum with the Tanzanian Fair Competition Commission’s unconditional approval. Silvercorp’s commitment to strengthening ties with Tanzanian government officials is evident as it diligently works towards the project’s implementation, aiming for the production of the first gold from Nyanzaga by the end of 2025.
In conclusion, Silvercorp’s revised offer not only demonstrates its confidence in the value of OreCorp but also signals a strong commitment to the Nyanzaga project. With the enhanced cash offer, Silvercorp positions itself favorably in the eyes of OreCorp shareholders, potentially marking a significant milestone in the mining industry.
