Silvercorp Metals (TSX:SVM) has entered into a share purchase agreement with Chaarat Gold Holdings, as well as a cooperation agreement with the National Investment Agency to acquire a 70% interest in the Tulkubash and Kyzyltash gold projects in Kyrgyzstan.
The total consideration for both agreements is US$162 million ($240.66 million).
As part of the cooperation agreement, the National Investment Agency (NIA) will receive US$70 million cash in two staged payments.
Meanwhile, under the share purchase agreement, Chaarat will receive US$92 million cash from Silvercorp, conditional upon receiving the Kyrgyz Government waiver which has been received.
CEO Rui Feng says all interests are aligned for the company to bring the projects into production.
“With our 20 years of mining expertise and financial strength, we are confident Silvercorp and Chaarat’s well-established local team can work with our Kyrgyz partner to advance ahead on the Projects and unlock value,” Feng says.
The company says the addition of the gold projects aligns with its strategic objectives of diversifying and growing its asset base by adding a third jurisdiction, and will position the company to benefit from gold’s strong fundamentals.
Silvercorp will commit to invest US$150 million for constructing a four million tonnes of ore per year open-pit mine/heap leach operation at Tulkubash. The company expects to be in production between 2027 and 2028.
At Kyzyltash, US$400 million will be invested to develop a sulphide deposit into a three to four million tonnes per year open pit-underground mine. Once in production, the Kyzyltash deposit could produce 190,000 to 230,000 ounces of gold annually for more than 18 years starting from 2031.
Silvercorp Metals is a Canadian mining company headquartered in Vancouver. The company aims to build and operate profitable mines that generate sustainable economic, social, and environmental value.
Write to Aaliyah Rogan at Mining.com.au
Images: Unsplash
