Canadian precious metals company Silvercorp Metals has signed a binding scheme implementation deed with Western Australia-based mining exploration firm OreCorp to acquire the latter for A$240m ($158m).

According to the terms of the scheme implementation deed, Silvercorp will buy all the fully-paid ordinary shares of OreCorp that are not held by the former or its associates.

The shareholders of the Australian Securities Exchange (ASX)-listed OreCorp will receive A$0.15 ($0.098) in cash and 0.0967 of a Silvercorp common share valued at A$0.45 ($0.3). It represents an implied value of A$0.6 ($0.39) per OreCorp share.

Besides, Silvercorp and OreCorp have engaged in a placement agreement, under which, more than 70.4 million newly issued fully-paid ordinary shares of the Australian company will be allocated to the Canadian firm at a rate of A$0.4 ($0.26) per share.

The equity placement will provide OreCorp with nearly A$28m ($18.4m) in funding to advance the development of its Nyanzaga gold project in Tanzania. This includes advancing resettlement activities and early project efforts.

OreCorp managing director and CEO Henk Diederichs said: “This transaction provides our shareholders with an immediate and significant upfront premium and exposure to a geographically diverse mid-tier precious metals company.”

Through the agreement, Silvercorp aims to develop a diversified precious metals company with a pro forma market cap of $630m.

Following completion of the placement, Silvercorp will own around 15% of the total outstanding ordinary shares of OreCorp.

OreCorp owns an 84% stake in the Nyanzaga gold project, which is anticipated to commence commercial production in the second half of 2025.

Silvercorp chairman and CEO Rui Feng said: “This transaction will create a new globally diversified precious metals producer.

”We believe this is a rare opportunity to leverage our technical expertise and strong balance sheet to unlock value for all shareholders by bringing Nyanzaga into commercial production by H2 2025.”

The scheme implementation deed is subject to various customary conditions, OreCorp shareholders’ approval, and court approval.