Silvercorp Metals Completes Acquisition of Chaarat ZAAV, Establishes Kyrgyz Gold Joint Venture

Silvercorp Metals Inc. (TSX: SVM) (NYSE American: SVM) has completed the acquisition of Chaarat ZAAV CJSC following the Kyrgyz government's waiver of its statutory pre-emptive right and Silvercorp's $92 million payment to Chaarat Gold Holdings Limited. This transaction, executed pursuant to a previously disclosed share purchase agreement, marks a significant expansion for the Canadian mining company into Central Asia's gold sector. The completion clears the way for Silvercorp to convert ZAAV into a joint venture company with Kyrgyzaltyn, a wholly owned subsidiary of the Kyrgyz Republic, structuring ownership with Silvercorp holding a 70% operating interest and Kyrgyzaltyn holding a 30% free-carried interest.

The joint venture's immediate focus will be on securing an extended mining license for the Tulkubash and Kyzyltash gold projects. The current license expires on June 25, 2032, and the partners will apply to extend it to June 25, 2062. This potential 30-year extension is contingent upon Silvercorp making a subsequent $60 million payment to the National Investment Agency under the President of the Kyrgyz Republic. The long-term license is critical for justifying the capital investment required for exploration and development, providing the operational certainty needed for large-scale mining projects. The transaction aligns with Silvercorp's stated strategy of pursuing merger and acquisition efforts to unlock value, as detailed in its corporate communications available at https://ibn.fm/SVM.

This acquisition is important as it represents a major strategic move by Silvercorp, traditionally known for its silver production in China, to diversify its asset base into gold in a new jurisdiction. The establishment of a joint venture with the state-owned Kyrgyzaltyn mitigates political and regulatory risks, a common concern for foreign mining investments. The structure, with the government holding a free-carried interest, incentivizes alignment between corporate and national interests for the project's success. The deal also injects significant capital into the Kyrgyz Republic's mining sector, potentially boosting economic development. The full financial details and implications of the transaction were outlined in the official press release hosted at https://ibn.fm/iuDnR.

The implications extend beyond corporate growth, impacting the regional mining landscape in Central Asia. Successfully developing the Tulkubash and Kyzyltash projects could establish a new, significant gold-producing district, attracting further foreign investment. For Silvercorp shareholders, the move diversifies revenue streams and commodity exposure. However, the venture also carries execution risks associated with operating in a new country, navigating local regulations, and meeting the financial commitments tied to the license extension. The completion of this acquisition demonstrates Silvercorp's active pursuit of its growth-through-acquisition pillar and could serve as a model for future partnerships between international miners and resource-rich governments.