Gold hopeful OreCorp has recommended its shareholders accept a takeover deal from Canadian miner Silvercorp Metals.
Gold hopeful OreCorp has recommended its shareholders accept a takeover deal from Canadian miner Silvercorp Metals.
The two parties signed a scheme implementation deed under which Silvercorp would acquire all the shares in OreCorp, according to an ASX announcement this morning.
Subiaco-based OreCorp’s shareholders would receive 15 cents in cash and 0.0967 of a Silvercorp common share, valued at 45 cents apiece, for each OreCorp share held.
The takeover deal represents an implied value of 60 cents per OreCorp share, representing a 41.7 per cent premium to its 20-day volume weighted average price.
Under the deal, Silvercorp would provide OreCorp with about $28 million in funding through an equity placement to develop the Nyanzaga gold project in Tanzania.
In August, OreCorp released its definitive feasibility study for its flagship project which tips it to produce 234,000 ounces of gold annually over a 10.7-year life-of-mine.
But the study also revealed an increase in expected pre-production capital costs to US$474 million, including a US$36 million contingency, up from the estimated capex of US$287 million.
OreCorp is targeting commercial gold production from the Nyanzaga gold project in the second half of the 2025 calendar year.
In today’s ASX announcement, OreCorp said its board unanimously recommends its shareholders vote in favour of the scheme, subject to a superior proposal and other conditions.
“This transaction provides our shareholders with an immediate and significant upfront premium and exposure to a geographically diverse mid-tier precious metals company,” OreCorp managing director Henk Diederichs said.
“With a strong operating history, solid balance sheet and significant mine building and operational experience, Silvercorp’s management team is well-positioned to fund and advance Nyanzaga into commercial production.”
Silvercorp chairman and chief executive Rui Feng said the transaction would create a new globally diversified previous metals producer.
“We believe this is a rare opportunity to leverage our technical expertise and strong balance sheet to unlock value for all shareholders by bringing Nyanzaga into commercial production in the second half of 2025,” he said.
The deal is subject to OreCorp's shareholders voting in favour, Federal Court approval and the completion of the placement.
On the market, OreCorp shares were trading up 11.49 per cent to 48.5 cents at 12PM AWST.
