Silvercorp Metals Inc. and Adventus Mining Corporation are pleased to announce that the parties have entered into a definitive arrangement agreement (the "Arrangement Agreement") pursuant to which Silvercorp has agreed to acquire all of the issued and outstanding common shares of Adventus (the "Transaction") by way of a plan of arrangement (the "Arrangement").

Under the terms of the Arrangement Agreement, each holder of the common shares of Adventus (each, an "Adventus Share") will receive 0.1015 of one Silvercorp common share (each, a "Silvercorp Share") in exchange for each Adventus Share (the "Exchange Ratio") at the effective time of the Transaction. The Exchange Ratio implies consideration of C$0.50 per Adventus Share based on the 20-day volume-weighted average prices ("VWAP") of Silvercorp Shares on the Toronto Stock Exchange (the "TSX") on April 25, 2024. This represents a premium of 31% based on the 20-day VWAP of Silvercorp on the TSX and Adventus on the TSX Venture Exchange (the "TSXV"), both as at April 25, 2024. The implied equity value of the Transaction is approximately C$200 million on a fully-diluted in-the-money basis. At closing, existing Silvercorp and Adventus shareholders will own approximately 81.6% and 18.4%, respectively, of Silvercorp shares outstanding on a fully-diluted in-the-money basis.

Strategic Rationale for Silvercorp
Provides immediate asset, geographic and metal diversification
    Pro forma asset portfolio consists of exposure to China and Ecuador, increased gold exposure, as well as metals (silver, copper, lead and zinc) that are key for a low-carbon future
Addition of the high margin, advanced El Domo project should significantly enhance Silvercorp's near-term production profile
Investment Protection Agreement for the project in place with the Government of Ecuador
    Key permits secured, including the Environmental License and tailings storage approval
    Existing US$175.5 million stream with Wheaton Precious Metals International Ltd. ("Wheaton"), combined with Silvercorp's existing cash and cash equivalents of approximately US$200 million is more than sufficient to fully fund El Domo through construction
    Silvercorp has the technical capabilities to bring El Domo into production on an accelerated basis, having built eight mines in its current operations, along with three flotation mills of similar size to El Domo (with a new 1,500 tpd flotation mill under construction at Ying), and three tailings storage facilities
Transaction is accretive on a net asset value per share, as well as on a Mineral Reserves and Mineral Resources basis
Adventus' PEA stage Condor asset provides further optionality and upside, including:
    2021 PEA for Condor North highlighted a 12-year mine life with average annual payable production of 187 thousand oz of gold and 758 thousand oz of silver at a by-product AISC of US$839/oz over the life of the mine
    Indicated Mineral Resources containing 2.3 million oz of gold and 12.8 million oz of silver and Inferred Mineral Resources containing 4.3 million oz of gold and 18.1 million oz of silver
Re-rating opportunity resulting from increased scale, significantly enhanced growth profile and establishing a presence in an emerging, mining-friendly jurisdiction

Silvercorp Chairman and CEO, Dr. Rui Feng, said:

"This transaction will create a new globally diversified green metals producer. It presents the opportunity for us to leverage our technical expertise and strong balance sheet to unlock value for all shareholders by constructing the El Domo project. We look forward to working with the Government of Ecuador and local communities, as well as leveraging the existing Adventus and Curimining teams, to grow our business in Ecuador which will generate sustainable economic, social, and environmental value for all stakeholders.

We would also like to acknowledge the hard work and contributions to the El Domo project by our future partners at Salazar Resources. Silvercorp will continue to work collaboratively with Salazar as El Domo is advanced into construction and ultimately operations."  

Benefits for Adventus Shareholders

• Immediate and significant premium to Adventus shareholders of 31% on a 20-day VWAP basis
• Exposure to Silvercorp's high quality and profitable silver mines, strong balance sheet and track record of returning capital to shareholders, while retaining participation in future upside from El Domo, Condor and Adventus' exploration portfolio
• De-risks development of El Domo by leveraging Silvercorp's technical capabilities and financial strength, its history of successful project construction, and its in-depth access to equipment supply chains that could result in cost savings for El Domo construction
• Potential for a further premium through a re-rating of Silvercorp shares as El Domo is advanced to production
• Option to realize cash proceeds given trading liquidity of Silvercorp shares (~US$8 million per day on the TSX and NYSE American)
• Continued commitment to best in class ESG practices by Silvercorp, which has an ESG rating of A from MCSI as well as EMS ISO 14001 and ISO 45001 certifications across its operations

Adventus President, CEO and Director, Christian Kargl-Simard, said:

"I am very proud of the accomplishments of our entire Adventus team, together with Salazar Resources and other partners since 2017, highlighted by the advancement of El Domo from an inferred resource to the construction ready project that it is today and the consolidation of our significant exploration portfolio in Ecuador. Our commitment to, and public record of transparency, technical excellence, environmental stewardship, and the highest standards of social responsibility have been the backbone of our success. I believe that Silvercorp strongly shares our values, in addition to bringing financial strength and experience from global operations. Combining the companies positions us well to deliver on El Domo and our other projects in collaboration with the government, local communities, and all stakeholders."

 

Source: prnewswire.com

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