Silvercorp Metals (TSX/NYSE: SVM) has initiated a takeover deal for Australian gold developer OreCorp (ASX: ORR).
Under the deal, the Canadian miner will acquire all of the shares in OreCorp not already held for A15c in cash and 0.0967 of a Silvercorp share for every OreCorp share held, representing an implied value of A60c for each OreCorp share.
Silvercorp will also provide OreCorp with $28 million in funding through an equity placement to advance the development of the Nyanzaga gold project, in Tanzania.
OreCorp holds an 84% interest in Nyanzaga, in partnership with the Government of Tanzania. The project is expected to start production in H2 2025.
The agreement aims to create a diversified, profitable precious metals company with a pro forma market cap $630 million, a robust growth pipeline and exposure to a highly prospective emerging.
A definitive feasibility study, announced in August 2022, estimated that Nyanzaga could deliver 2.5 million ounces of gold over a 10 year life.
Nyanzaga is located approximately 40 km north east of the Bulyanhulu mine, one of Barrick Gold Corporation’s two gold mines in the Lake Victoria Goldfields, which together with the North Mara mine produced approximately 547,000 ounces of gold in 2022.
“This transaction will create a new globally diversified precious metals producer,” said Silvercorp Chairman and CEO, Dr. Rui Feng.
Shares of OreCorp surged 10.3% Monday on the ASX. The gold developer has a market capitalization of A$189 million ($124m).