Silvercorp Metals Inc. – Update on OreCorp Acquisition Progress

Silvercorp Metals Inc. s (TSX: SVM | NYSE-A: SVM) has provided an update on its proposed acquisition of OreCorp Limited (ASX: ORR).

Silvercorp and OreCorp have completed the extensive documentation necessary to seek OreCorp shareholder approval for the Australian scheme of arrangement. OreCorp’s Scheme booklet, including a fair and reasonable conclusion from the Independent Expert’s Report, has been sent to OreCorp shareholders for review. The Federal Court of Australia has approved the convening of the OreCorp shareholders meeting to vote on the Scheme, which has unanimous support from the OreCorp Board, on December 8, 2023.

OreCorp’s principal asset is an 84% interest in the fully permitted Nyanzaga Gold Project located in the Lake Victoria Goldfield of Tanzania. Silvercorp recently received a Merger Clearance Certificate from the Tanzanian Fair Competition Commission approving the Transaction without conditions. This represents the sole Tanzanian regulatory requirement needed for the acquisition to close.

Silvercorp generated operating cash flow of US$28.8 million in Q2 Fiscal 2024 and ended the quarter with US$189.1 million in cash, cash equivalents and short-term investments, as well as an additional US$124.0 million in equity investments in associates and other companies. As such, Silvercorp is in a strong financial position to advance Nyanzaga into production, adding value for both OreCorp and Silvercorp shareholders.

Based on the August 2022 definitive feasibility study, Nyanzaga has an estimated pre-production capital cost of US$474 million, including US$36 million in contingency. Once in production (targeting H2/25), the project is forecasted to produce 234 koz of gold per annum and generate an average annual pre-tax cash flow of US$140 million over the 10.7-year mine life, assuming a gold price of US$1,750 per ounce, which will be significantly accretive to Silvercorp’s operating and financial profiles.

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