Canada’s Silvercorp Metals has raised the cash component of its takeover offer for Australia-based mineral exploration company OreCorp by 26.7%.
Under the binding scheme implementation deed signed in August 2023, Silvercorp agreed to buy all fully paid OreCorp ordinary shares that are not already owned by the company or its associates.
It also offered to inject A$28m ($18.38m) into OreCorp through an equity placement to develop its Nyanzaga gold project in Mwanza, Tanzania.
OreCorp shareholders were previously offered A$0.15 in cash and 0.0967 of Silvercorp common shares for each share held.
Silvercorp has now increased the offer’s cash element to A$0.19, while the scrip component remains unchanged.
The OreCorp board has unanimously approved the new offer and recommended shareholders to vote for it, provided there is no superior bid.
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It is also contingent on an independent expert conceding that the proposal is in OreCorp shareholders’ best interests.
Shareholders will vote on the revised bid at a meeting scheduled for 8 December 2023.
In a statement, Silvercorp said: “Subject to the qualifications, each OreCorp Director intends to vote, or cause to be voted, all OreCorp shares held or controlled by them at the time of the scheme meeting (representing 3.94% of OreCorp’s issued shares as at the date of this announcement) in favour of the revised scheme.“
Timothy Goyder, who holds a 5.14% stake in OreCorp; and Rollason, which owns a 10.47% stake in OreCorp, have supported the new proposal.
The two have signed voting intention statements in favour of the sweetened bid.
Silvercorp has already secured Tanzanian regulatory clearance for the deal and now awaits approval from the Australian Federal Court.
Currently, Silvercorp owns around 72.3 million OreCorp shares, constituting a 15.4% stake.
The buyout, upon getting all relevant approvals, would result in the formation of a diversified precious metals company listed on the TSX, NYSE and ASX.
It will also offer Silvercorp access to the Nyanzaga project, which targets first gold in H2 2025. A definitive feasibility study in 2022 found that the project could generate 2.5 million ounces of gold over a life of 10.7 years.
