Silvercorp Metals has signed a definitive agreement to acquire all issued and outstanding shares of Adventus Mining, a move set to bolster its asset and metal diversification.
The transaction, valued at around C$200m ($146.5m), is expected to be accretive to Silvercorp’s net asset value per share and its mineral reserves and resources.
Under the terms of the agreement, Adventus shareholders will receive 0.1015 of a Silvercorp share for each share held, at an implied value of C$0.50, marking a 31% premium on the 20-day volume-weighted average prices of the two companies’ shares.
The combined entity will see Silvercorp and Adventus shareholders owning roughly 81.6% and 18.4% of the outstanding Silvercorp shares, respectively.
Silvercorp has highlighted the strategic benefits of the acquisition, including immediate asset diversification with exposure to markets in China and Ecuador, and an increased focus on gold and essential metals like silver, copper, lead and zinc.
This acquisition includes the El Domo project, an advanced, high-margin asset that is expected to significantly enhance Silvercorp’s production profile in the near term.
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By GlobalData
The Condor asset, currently at the preliminary economic assessment stage, offers further potential with a projected 12-year mine life and average annual production of 187,000oz of gold and 758,000oz of silver.
El Domo, 75% owned by Adventus, spans nearly 2.9km² and is complemented by a 118-hectare buffer zone.
The transaction is slated for completion in the third quarter of 2024, with Adventus’ board unanimously recommending shareholders to vote in favour of the deal.
Besides, Silvercorp agreed to invest C$25.6m in Adventus by subscribing to new shares at C$0.38 each. This investment will give Silvercorp a 15% stake in Adventus upon completion.
Silvercorp chairman and CEO Dr Rui Feng said: “This transaction will create a new globally diversified green metals producer. It presents the opportunity for us to leverage our technical expertise and strong balance sheet to unlock value for all shareholders by constructing the El Domo project.
“We look forward to working with the Government of Ecuador and local communities, as well as leveraging the existing Adventus and Curimining teams, to grow our business in Ecuador, which will generate sustainable economic, social and environmental value for all stakeholders.
“We would also like to acknowledge the hard work and contributions to the El Domo project by our future partners at Salazar Resources. Silvercorp will continue to work collaboratively with Salazar as El Domo is advanced into construction and ultimately operations.”
