Silvercorp Provides Update on OreCorp Transaction Progress


Trading Symbol:        TSX: SVM


  • OreCorp’s Scheme Booklet, including a fair and reasonable conclusion from the Independent Expert’s Report, sent to OreCorp shareholders last week
  • Scheme Meeting of OreCorp shareholders to take place at 10:00 am (AWST) on December 8, 2023
  • Approval from the Tanzanian Fair Competition Commission for the proposed acquisition has been issued to Silvercorp
  • Silvercorp generated $28.8 million in operating cash flow during Q2 Fiscal 2024 and held $189.1 million in cash, cash equivalents and short-term investments, plus a further equity investment portfolio with a total market value of $124.0 million as at September 30, 2023, after it invested $18.5 million into the equity of OreCorp to finance its Resettlement Action Plan (“RAP”) for the Nyanzaga Gold Project


VANCOUVER, British Columbia – November 16, 2023 – Silvercorp Metals Inc. (“Silvercorp” or the “Company”) (TSX/NYSE American: SVM) is pleased to provide an update on the proposed transaction (the “Transaction”) with OreCorp Limited (ASX: ORR) (“OreCorp”) as first announced on August 6, 2023.
Transaction Progress

  • The extensive documentation necessary to seek OreCorp shareholder approval of the Australian scheme of arrangement under Part 5.1 of the Corporations Act 2001 (Cth) (the “Scheme”) has been sent to OreCorp shareholders
  • On November 2, 2023 the Federal Court of Australia approved: the convening of the OreCorp shareholders meeting to consider and vote on the Scheme (the “Scheme Meeting”), currently scheduled to take place at 10am (AWST), December 8, 2023, and the delivery on November 8, 2023 of the explanatory statement and notice of Scheme meeting (together, the “Scheme Booklet”) to OreCorp shareholders for their consideration
  • The Scheme Booklet sets out the key terms of the Transaction, the reasons for OreCorp’s directors’ recommendation, and includes an Independent Expert’s Report that concluded the Scheme, in the absence of a superior proposal, is fair and reasonable and in the best interests of OreCorp shareholders
  • In late October, representatives of both companies attended the Tanzanian Mining & Investment Forum and held constructive meetings with several representatives of the Tanzanian government who continue to express enthusiasm and support for the Transaction and development of the Nyanzaga mine

Tanzanian FCC Approval
After the Silvercorp team held meetings with the Government of Tanzanian, on November 6, 2023, Silvercorp received a Merger Clearance Certificate (dated November 3, 2023) from the Tanzanian Fair Competition Commission (the “FCC”) approving the Transaction without conditions. The FCC approval represents the sole Tanzanian regulatory requirement needed to complete the Transaction.
Silvercorp Chairman and CEO, Dr. Rui Feng commented: “We would like to express our gratitude to the FCC for their support throughout the approval process. We also thank everyone involved for their collective efforts over the past few months, resulting in successfully achieving numerous milestones for the transaction—paving the way for the creation of a new globally diversified precious metals producer. We eagerly anticipate continuing Nyanzaga’s project execution in close partnership with the Government of Tanzania to ensure a successful development that benefits all stakeholders.
Silvercorp has the financial strength to close the Transaction and advance the development of the Nyanzaga Gold Project
Silvercorp reported strong Q2 Fiscal 2024 financial results on November 9, 2023. During the quarter, cash flow from operating activities totaled $28.8 million, and with $189.1 million in cash, cash equivalents, and short-term investments at the end of Q2, Silvercorp has the financial strength to close the Transaction and advance the development of the Nyanzaga Gold Project.
Silvercorp’s equity investment portfolio, valued at $124.0 million as of September 30, 2023, includes a $18.5 million private placement in OreCorp, completed in August 2023. Proceeds from this investment have been applied towards resettlement activities outlined in the RAP. This important step will assist in facilitating the prompt development of the Nyanzaga Gold Project. As of OreCorp’s report for the quarter ended September 30, 2023, issued October 19th, compensation payments in relation to the implementation of the RAP are well advanced, with approximately 84% of the agreements fully executed and approximately US$6 million paid to date. The tender process for constructing resettlement housing is well underway.
Transaction Details Recap
Silvercorp intends to acquire all fully-paid ordinary shares of OreCorp not held by Silvercorp (the “OreCorp Shares”) by way of the Scheme, with each holder of OreCorp Shares (other than ineligible shareholders and Silvercorp) receiving, for each OreCorp Share held on the record date for the Scheme, A$0.15 in cash and 0.0967 of a Silvercorp common share, or at the OreCorp shareholder’s election, 0.0967 of a new Silvercorp CDI (subject to ASX admitting Silvercorp to the official list of ASX and approving Silvercorp CDIs for official quotation). The Transaction is subject to the satisfaction and/or waiver of various remaining conditions, including OreCorp shareholders approving the Scheme at the Scheme Meeting, final approval of the Federal Court of Australia, and acceptance from the TSX and NYSE American, including in respect of the issuance and listing of new Silvercorp common shares issuable pursuant to the Scheme.
The OreCorp Board has unanimously approved the Transaction and has recommended that all OreCorp shareholders vote in favour of the Scheme at the Scheme Meeting, in the absence of a superior proposal and subject to the independent expert appointed by OreCorp (the “Independent Expert”) continuing to conclude that the Scheme is in the best interests of OreCorp shareholders.