Silvercorp Metals Acquires Majority Stake in Kyrgyz Gold Projects for $162 Million

Silvercorp Metals Inc. has entered into a Share Purchase Agreement with Chaarat Gold Holdings Limited and a Cooperation Agreement with the National Investment Agency under the President of the Kyrgyz Republic to acquire a 70% interest in Chaarat ZAAV CJSC. The transaction involves cash consideration of $162 million and grants Silvercorp control over the fully permitted Tulkubash and Kyzyltash gold projects along with surrounding exploration licenses in the Tian Shan region of the Kyrgyz Republic. This acquisition represents a significant strategic move for Silvercorp as it diversifies its asset base beyond its existing silver, gold, lead, and zinc operations.

Upon completion of the transaction, ZAAV will be restructured into a joint venture company with Kyrgyzaltyn, where Silvercorp will hold a 70% operating interest and Kyrgyzaltyn will retain a 30% free-carried interest. The financial structure of the deal involves staged payments, with the National Investment Agency receiving $70 million tied to government waivers and license extensions, while Chaarat will receive $92 million conditional on receipt of the Kyrgyz Government waiver. The company has confirmed that this waiver has now been issued, allowing Silvercorp to proceed toward closing the transaction. This development is crucial as it removes a significant regulatory hurdle and enables the company to advance its operational plans in the region.

The acquisition aligns with Silvercorp's stated strategy of creating shareholder value through ongoing merger and acquisition efforts to unlock value, as outlined in their corporate communications. By gaining control of these gold projects, Silvercorp expands its geographical footprint and resource portfolio in a mineral-rich region known for its gold potential. The Tian Shan region has historically been a significant gold-producing area, and the Tulkubash and Kyzyltash projects offer Silvercorp access to fully permitted assets that can potentially contribute to the company's production profile in the medium to long term.

This transaction occurs within the broader context of increasing consolidation in the mining sector, where companies seek to secure strategic assets through acquisitions. For investors following Silvercorp's developments, the latest news and updates relating to SVM are available in the company's newsroom at https://ibn.fm/SVM. The successful completion of this acquisition would mark Silvercorp's entry into Kyrgyzstan's mining sector through a partnership structure that includes local participation via Kyrgyzaltyn's 30% interest. This joint venture approach may facilitate smoother operations and community relations in the host country while providing Silvercorp with majority control and operational responsibility over the projects.