Trading Symbols: TSX/NYSE AMERICAN: SVM
TSXV: ADZN / OTCQX: ADVZF
Under the terms of the Arrangement Agreement, each holder of the common shares of Adventus (each, an "Adventus Share") will receive 0.1015 of one Silvercorp common share (each, a "Silvercorp Share") in exchange for each Adventus Share (the "Exchange Ratio") at the effective time of the Transaction. The Exchange Ratio implies consideration of
- Provides immediate asset, geographic and metal diversification
- Pro forma asset portfolio consists of exposure to
China andEcuador , increased gold exposure, as well as metals (silver, copper, lead and zinc) that are key for a low-carbon future
- Pro forma asset portfolio consists of exposure to
- Addition of the high margin, advanced El Domo project should significantly enhance Silvercorp's near-term production profile
- Investment Protection Agreement for the project in place with the Government of
Ecuador - Key permits secured, including the Environmental License and tailings storage approval
- Existing
US$175.5 million stream withWheaton Precious Metals International Ltd. ("Wheaton"), combined with Silvercorp's existing cash and cash equivalents of approximatelyUS$200 million is more than sufficient to fully fund El Domo through construction - Silvercorp has the technical capabilities to bring El Domo into production on an accelerated basis, having built eight mines in its current operations, along with three flotation mills of similar size to El Domo (with a new 1,500 tpd flotation mill under construction at Ying), and three tailings storage facilities
- Investment Protection Agreement for the project in place with the Government of
- Transaction is accretive on a net asset value per share, as well as on a Mineral Reserves and Mineral Resources basis
- Adventus' PEA stage Condor asset provides further optionality and upside, including:
- 2021 PEA for Condor North highlighted a 12-year mine life with average annual payable production of 187 thousand oz of gold and 758 thousand oz of silver at a by-product AISC of
US$839 /oz over the life of the mine - Indicated Mineral Resources containing 2.3 million oz of gold and 12.8 million oz of silver and Inferred Mineral Resources containing 4.3 million oz of gold and 18.1 million oz of silver
- 2021 PEA for Condor North highlighted a 12-year mine life with average annual payable production of 187 thousand oz of gold and 758 thousand oz of silver at a by-product AISC of
- Re-rating opportunity resulting from increased scale, significantly enhanced growth profile and establishing a presence in an emerging, mining-friendly jurisdiction
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
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
- Immediate and significant premium to Adventus shareholders of 31% on a 20-day VWAP basis
- Exposure to Silvercorp's high quality and profitable silver mines, strong balance sheet and track record of returning capital to shareholders, while retaining participation in future upside from
El Domo , Condor and Adventus' exploration portfolio - De-risks development of
El Domo by leveraging Silvercorp's technical capabilities and financial strength, its history of successful project construction, and its in-depth access to equipment supply chains that could result in cost savings forEl Domo construction - Potential for a further premium through a re-rating of Silvercorp shares as
El Domo is advanced to production - Option to realize cash proceeds given trading liquidity of Silvercorp shares (
~US$8 million per day on the TSX and NYSE American) - Continued commitment to best in class ESG practices by Silvercorp, which has an ESG rating of A from MCSI as well as EMS ISO 14001 and ISO 45001 certifications across its operations
Adventus President, CEO and Director, Christian Kargl-Simard, said:
"I am very proud of the accomplishments of our entire Adventus team, together with Salazar Resources and other partners since 2017, highlighted by the advancement of
The advanced high-grade copper-gold
In 2017, Adventus entered into an agreement with Salazar Resources Ltd. ("Salazar") pursuant to which Adventus earned its majority interest in the Curipamba project by funding exploration and development expenditures of
In
- Proven and Probable Mineral Reserves of 6.5 million tonnes at 1.93% Cu, 2.52 g/t Au, 2.49% Zn, 45.7 g/t Ag, 0.25% Pb
- A 10-year mine life with average annual production of 10,463 tpa copper and 21,390 tpa copper equivalent over the life-of-mine
- Production C1 cash cost of
US$1.14 /lb and AISC ofUS$1.26 /lb copper equivalent - Initial capital cost (including refundable VAT) of
US$248 million with a payback period of 2.6 years, after-tax IRR of 32% and NPV8% ofUS$259 million , utilizingUS$3.50 /lb Cu,US$1,700 /oz Au,US$1.20 /lb Zn,US$23.00 /oz Ag andUS$0.95 /lb Pb
Concurrent with entering into the Arrangement Agreement, Silvercorp and Adventus entered into an investment agreement pursuant to which Silvercorp will subscribe for 67,441,217 Adventus Shares at an issue price of
The funding of the above listed expenses through the Placement was a critical factor in Silvercorp determining to proceed with the Transaction, as the majority of the expenses must be paid prior to the closing of the Transaction and Adventus does not have sufficient cash on hand to fund these costs. Silvercorp has requested the repayment of the Altius Loan as under the terms of this loan, Altius has the right to increase its royalty on the El Domo project. It is Silvercorp's view that if this royalty right was exercised, it would have a negative impact on the project economics. Silvercorp has also requested the repayment of the Trafigura Facility, which matures on
The completion of the Placement has been conditionally approved by the TSXV and remains subject to final acceptance by the TSXV on behalf of Adventus for the listing of the Adventus Shares to be issued to Silvercorp. The Adventus Shares to be issued to Silvercorp will be subject to a statutory four-month hold period under applicable securities laws. Completion of the Placement and the repayment of indebtedness does not provide a guarantee that the Transaction will be completed.
Under the terms of the Transaction, Silvercorp will acquire all the issued and outstanding Adventus Shares (other than Adventus Shares owned by Silvercorp at the effective time of the Transaction) and Adventus shareholders will receive 0.1015 Silvercorp Shares for each existing Adventus Share held. All outstanding Adventus stock options and warrants will become exercisable for Silvercorp Shares, with the number of Silvercorp Shares issuable on exercise and the exercise price adjusted in accordance with the Exchange Ratio. All outstanding Adventus restricted share units will immediately vest upon closing of the Transaction and be settled in cash, funded by Silvercorp through Adventus.
The Transaction will be carried out by way of a court-approved Arrangement under the Canada Business Corporations Act and a resolution to approve the Transaction will be submitted to Adventus shareholders and holders of Adventus stock options and restricted share units at a special meeting of securityholders expected to be held on or about
In addition to Adventus securityholder and court approval, the Transaction is also subject to the satisfaction of certain other closing conditions customary for a transaction of this nature. The Transaction has been conditionally approved by the TSXV but remains subject to final approval of the TSXV on behalf of Adventus, and approval of the TSX and NYSE American on behalf of Silvercorp, including the acceptance for listing of the Silvercorp Shares to be issued in connection with the Transaction. The Transaction is expected to be completed in the third quarter of 2024.
The Arrangement Agreement includes representations, warranties, covenants, indemnities, termination rights and other provisions customary for a transaction of this nature. In particular, the Arrangement Agreement provides for customary deal protections, including a non-solicitation covenant on the part of Adventus and a right for Silvercorp to match any Superior Proposal (as defined in the Arrangement Agreement). The Arrangement Agreement includes a termination fee of C$10 million, payable by Adventus, under certain circumstances (including if the Arrangement Agreement is terminated in connection with Adventus pursuing a Superior Proposal).
The board of directors of Adventus (the "Adventus Board") has unanimously approved the Transaction and recommends that Adventus shareholders vote in favour of the Transaction at the Special Meeting.
Further details regarding the terms of the Transaction are set out in the Arrangement Agreement, which will be publicly filed by Adventus under its profile on SEDAR+ at www.sedarplus.ca. Additional information regarding the terms of the Arrangement Agreement, the background to the Transaction, the rationale for the recommendations made by the Adventus Board and how Adventus shareholders can participate in and vote at the Special Meeting to be held to consider the Transaction will be provided in the management information circular for the Special Meeting which will also be filed at www.sedarplus.ca. Adventus shareholders are urged to read these and other relevant materials when they become available.
Silvercorp and Adventus will host a joint conference call to discuss the Transaction on
- Toll-free in the
U.S. andCanada : 1-888-664-6383 - All other callers: 1-416-764-8650
- Register to join via webcast: https://app.webinar.net/zj1waBlAZdb
Silvercorp does not currently own any Adventus Shares. Following completion of the Placement, Silvercorp will own 67,441,217 Adventus Shares (the "Placement Shares"), representing approximately 15% of the issued and outstanding Adventus Shares. The Placement Shares were issued to Silvercorp at an issue price of
Adventus announces that Luc Vets, has been appointed as Project Consultant effective
Silvercorp is a Canadian mining company producing silver, gold, lead, and zinc with a long history of profitability and growth potential. Silvercorp's strategy is to create shareholder value by 1) focusing on generating free cash flow from long life mines; 2) organic growth through extensive drilling for discovery; 3) ongoing merger and acquisition efforts to unlock value; and 4) long term commitment to responsible mining and ESG.
This announcement has been approved for distribution by the Board of Directors of each of Silvercorp and Adventus.
Phone: (604) 669-9397
Toll Free 1(888) 224-1881
Email: investor@Silvercorp.ca Website: www.Silvercorp.ca
President, CEO and Director Phone: (416) 230 3440
Email: christian@adventusmining.com
Website: www.Adventusmining.com
This news release includes "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of applicable securities laws relating to, among other things, the anticipated benefits of the Transaction, the strategic rationale for the Transaction, the anticipated use of the proceeds of the Placement, the timing and anticipated receipt of required shareholder, regulatory court, stock exchange or other approvals, the ability of the parties to satisfy the other conditions to the closing of the Transaction and the anticipated timing for closing of the transaction. Forward-looking information may in some cases be identified by words such as "will", "anticipates", "expects", "intends" and similar expressions suggesting future events or future performance.
We caution that all forward-looking information is inherently subject to change and uncertainty and that actual results may differ materially from those expressed or implied by the forward-looking information. A number of risks, uncertainties and other factors could cause actual results and events to differ materially from those expressed or implied in the forward-looking information or could cause our current objectives, strategies and intentions to change. Accordingly, we warn investors to exercise caution when considering statements containing forward-looking information and that it would be unreasonable to rely on such statements as creating legal rights regarding our future results or plans. We cannot guarantee that any forward-looking information will materialize and you are cautioned not to place undue reliance on this forward-looking information. Any forward-looking information contained in this news release represent expectations as of the date of this news release and are subject to change after such date. However, we are under no obligation (and we expressly disclaim any such obligation) to update or alter any statements containing forward-looking information, the factors or assumptions underlying them, whether as a result of new information, future events or otherwise, except as required by law. All of the forward-looking information in this news release is qualified by the cautionary statements herein.
Forward-looking information is provided herein for the purpose of giving information about the Transaction referred and its expected impact. Readers are cautioned that such information may not be appropriate for other purposes. Completion of the Transaction is subject to customary closing conditions, termination rights and other risks and uncertainties including court and shareholder approval. Accordingly, there can be no assurance that the Transaction will occur, or that it will occur on the terms and conditions contemplated in this news release. The Transaction could be modified, restructured or terminated. There can also be no assurance that the strategic benefits expected to result from the Transaction will be fully realized. In addition, if the transaction is not completed, and each of the parties continues as an independent entity, there are risks that the announcement of the Transaction and the dedication of substantial resources of each party to the completion of the Transaction could have an impact on such party's current business relationships (including with future and prospective employees, customers, distributors, suppliers and partners) and could have a material adverse effect on the current and future operations, financial condition and prospects of such party.
A comprehensive discussion of other risks that impact Silvercorp and Adventus can also be found in their public reports and filings which are available under their respective profiles at www.sedarplus.ca.
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