The acquisition includes the El Domo project, an advanced high-grade copper-gold project that is 75% owned by Adventus and covers around 172ha and will significantly enhance Silvercorp’s production profile in the near term
Silvercorp to acquire Adventus Mining. (Credit: Alex Banner from Pixabay)
Canadian-based precious metals company Silvercorp Metals has agreed to acquire Adventus Mining, a copper-gold exploration and development company, for around C$200m ($146m).
Under the terms of the arrangement agreement, Silvercorp will acquire all the issued and outstanding common shares of Adventus, by way of a plan of arrangement.
Adventus shareholders will receive 0.1015 of one Silvercorp common share in exchange for each Adventus Share at the effective time of the transaction.
The exchange ratio indicates a price of C$0.50 per Adventus Share, a 31% premium to 20-day volume-weighted average prices (VWAP) of Silvercorp shares on the Toronto Stock Exchange (TSX) and Adventus on the TSX Venture Exchange (TSXV).
The transaction is expected to be completed in the third quarter of 2024, subject to Adventus’ board unanimously recommending shareholders to vote in favour of the deal.
Upon closing, existing Silvercorp and Adventus shareholders will own around 81.6% and 18.4%, respectively, of Silvercorp shares outstanding on a fully-diluted in-the-money basis.
Silvercorp chairman and CEO 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.”
The acquisition will provide Silvercorp with certain strategic benefits, including immediate asset diversification, and an increased focus on gold and metals like silver, copper, lead, and zinc.
In addition to the acquisition, Silvercorp has agreed to invest C$25.6m in Adventus by subscribing to new shares at C$0.38 each.
The proposed investment will provide Silvercorp with a 15% stake in Adventus.
The acquisition includes the El Domo project, a high-margin asset that will significantly enhance Silvercorp’s production profile in the near term.
El Domo is an advanced high-grade copper-gold project that is 75% owned by Adventus and covers around 172ha with a buffer of 118ha (2.9km2 in total).
Adventus president, CEO and director Christian Kargl-Simard said: “Our commitment to, and public record of transparency, technical excellence, environmental stewardship, and the highest standards of social responsibility have been the backbone of our success.
“I believe that Silvercorp strongly shares our values, in addition to bringing financial strength and experience from global operations.
“Combining the companies positions us well to deliver on El Domo and our other projects in collaboration with the government, local communities, and all stakeholders.”