Silvercorp Receives TSX Conditional Approval in Connection with OreCorp Offer

Rhea-AI Summary

Silvercorp Metals Inc. has received conditional approval from the Toronto Stock Exchange for the listing of shares in connection with an off-market takeover offer for OreCorp Limited. The company has also submitted all requested documents to the NYSE American and anticipates conditional approval shortly. The OreCorp Board has recommended the Silvercorp Offer, despite a competing offer from Perseus Mining Limited. Silvercorp's strong balance sheet and cash generation position it well for the development of the Nyanzaga project.

Insights

Market Research Analyst

The conditional approval by the TSX for Silvercorp Metals Inc.'s off-market takeover offer for OreCorp Limited shares signifies a strategic move that could reshape the competitive landscape within the mining sector. This transaction, combining Silvercorp's cash and investment assets with OreCorp's Nyanzaga project, could result in a synergistic effect, enhancing Silvercorp's market position and asset base. The pending approval from the NYSE American further underscores the international dimension of this deal, which may impact trading liquidity and investor perceptions of Silvercorp's growth trajectory.

From a market research perspective, the unanimous recommendation by the OreCorp Board and the absence of a superior proposal strengthen the likelihood of the deal's completion. However, the announcement of a competing offer from Perseus Mining Limited adds a layer of complexity. The OreCorp Board's determination that Perseus's offer does not constitute a superior proposal may influence OreCorp shareholders' acceptance of Silvercorp's terms, potentially affecting the stock's performance in the short term. Stakeholders should monitor the Tanzanian FCC's decision, as regulatory approval is a critical factor that could sway the outcome.

Financial Analyst

The financial implications of Silvercorp's offer for OreCorp shareholders involve a mix of equity and cash, which could appeal to investors seeking both stability and growth potential. Silvercorp's strong balance sheet, with significant cash, cash equivalents and short-term investments, alongside an equity investment portfolio, provides a solid foundation for funding the proposed Transaction. The financial health of Silvercorp, as reflected in these figures, may reassure investors about the company's ability to manage the acquisition without over-leveraging its position.

For Silvercorp, the acquisition of OreCorp represents a strategic investment into the Nyanzaga project, which holds the promise of future revenue streams and diversification of its asset portfolio. The Transaction's impact on Silvercorp's stock will largely depend on the post-merger integration process and the realization of projected synergies. Investors should consider the long-term benefits of the combined entity, such as increased market capitalization and potential for re-rating, against the immediate dilution of shares and cash expenditure.

Legal Expert

The legal processes involved in cross-border transactions such as the Silvercorp and OreCorp deal are complex and subject to regulatory approvals from various jurisdictions. The conditional approvals from exchanges like the TSX and NYSE American are just one aspect of the legal framework governing such transactions. The critical approval pending from the Tanzanian Fair Competition Commission indicates that the Transaction is still under antitrust scrutiny, which is common in mergers and acquisitions to prevent the creation of monopolies and maintain fair competition.

Furthermore, the legal stipulations of the Australian Corporations Act, under which Silvercorp will issue a notice once NYSE-A approval is obtained, demonstrate the multi-layered legal considerations that must be navigated. The unanimous recommendation by the OreCorp Board in favor of Silvercorp's offer and the absence of a superior proposal, suggest that the legal groundwork laid out in the Bid Implementation Deed is steering the takeover process. Stakeholders should be aware of the potential legal complexities that could arise, especially in light of the competing offer from Perseus Mining Limited, which may lead to further legal evaluations or shareholder disputes.

Trading Symbol: TSX: SVM
                              NYSE AMERICAN: SVM

VANCOUVER, BC, Jan. 24, 2024 /PRNewswire/ - Silvercorp Metals Inc. ("Silvercorp" or the "Company") (TSX: SVM) (NYSE American: SVM) today announced that it has received conditional approval from the Toronto Stock Exchange (the "TSX") for the listing of the Silvercorp shares to be issued in connection with Silvercorp's off-market takeover offer (the "Silvercorp Offer") for all of the shares of OreCorp Limited ("OreCorp") not already owned by Silvercorp for consideration comprising 0.0967 common shares of Silvercorp and A$0.19 cash per OreCorp share (the "Transaction"), as described in the Company's news release of December 26, 2023.

Final TSX approval is subject to the Company meeting certain customary conditions required by the TSX.

The Company further notes that it has submitted all requested documents to the NYSE American ("NYSE-A") and conditional approval from the NYSE-A is expected shortly. Once the conditional approval from the NYSE-A is granted, Silvercorp will issue a notice in accordance with the Australian Corporations Act that a condition to the Silvercorp Offer has been satisfied.

As previously disclosed, the Company anticipates receiving a merger-approval decision in relation to the Silvercorp Offer from the Tanzanian Fair Competition Commission ("FCC") by mid-February. Silvercorp will provide further updates on the Transaction as appropriate.

Silvercorp notes that the OreCorp Board has provided a unanimous recommendation in favour of the Silvercorp Offer, in the absence of a superior proposal and subject to the independent expert's report concluding, and continuing to conclude that the Silvercorp Offer is reasonable to OreCorp shareholders.

Silvercorp acknowledges the announcement made by Perseus Mining Limited ("Perseus") on January 22, 2024 that Perseus intends to make a competing off-market takeover offer for all OreCorp shares ("Perseus Offer"). As announced by OreCorp on January 22, 2024, the OreCorp Board determined that the Perseus Offer was not considered to be a superior proposal for the purposes of the Bid Implementation Deed between OreCorp and the Company.

Silvercorp highlights that, as disclosed in its offer document, as at September 30, 2023, the Company had cash and cash equivalents and short-term investments of US$189.1 million and an equity investment portfolio in associates and other companies with a total market value of US$124.0 million. Silvercorp's strong balance sheet, together with its track record of cash generation from its existing asset base, positions it favourably with respect to the development and commissioning of the Nyanzaga project. The Silvercorp Offer provides OreCorp shareholders with the opportunity to be exposed to enhanced trading liquidity, re-rating potential and participation in further upside from the Nyanzaga project and Silvercorp's existing portfolio.

About Silvercorp

Silvercorp is a Canadian mining company producing silver, gold, lead, and zinc with a long history of profitability and growth potential. The Company's strategy is to create shareholder value by 1) focusing on generating free cashflow from long life mines; 2) organic growth through extensive drilling for discovery; 3) ongoing merger and acquisition efforts to unlock value; and 4) long term commitment to responsible mining and ESG. For more information, please visit our website at www.silvercorpmetals.com.

For further information
Silvercorp Metals Inc.
Lon Shaver
President
Phone: (604) 669-9397
Toll Free 1(888) 224-1881
Email: investor@silvercorp.ca
Website: www.silvercorpmetals.com

CAUTIONARY DISCLAIMER - FORWARD-LOOKING STATEMENTS

Certain of the statements and information in this news release constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of applicable Canadian and US securities laws (collectively, "forward-looking statements"). Any statements or information that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "expects", "is expected", "anticipates", "believes", "plans", "projects", "estimates", "assumes", "intends", "strategies", "targets", "goals", "forecasts", "objectives", "budgets", "schedules", "potential" or variations thereof or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements. Forward-looking statements relate to, among other things: the Transaction; TSX final approval; receipt of conditional approval from the NYSE-American; FCC approval; the Company's intentions with respect to the Nyanzaga Project; statements regarding enhanced trading liquidity, re-rating potential and participation in further upside; price of silver and other metals; the accuracy of mineral resource and mineral reserve estimates at the Company's material properties; the sufficiency of the Company's capital to finance the Company's operations; estimates of the Company's revenues and capital expenditures; estimated production from the Company's mines in the Ying Mining District and the GC Mine; timing of receipt of permits and regulatory approvals; availability of funds from production to finance the Company's operations; and access to and availability of funding for future construction, use of proceeds from any financing and development of the Company's properties.

Actual results may vary from forward-looking statements. Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those reflected in the forward-looking statements, including, without limitation, risks relating to: global economic and social impact of COVID-19; fluctuating commodity prices; calculation of resources, reserves and mineralization and precious and base metal recovery; interpretations and assumptions of mineral resource and mineral reserve estimates; exploration and development programs; feasibility and engineering reports; permits and licences; title to properties; property interests; joint venture partners; acquisition of commercially mineable mineral rights; financing; recent market events and conditions; economic factors affecting the Company; timing, estimated amount, capital and operating expenditures and economic returns of future production; integration of future acquisitions into the Company's existing operations; competition; operations and political conditions; regulatory environment in China and Canada; environmental risks; foreign exchange rate fluctuations; insurance; risks and hazards of mining operations; key personnel; conflicts of interest; dependence on management; internal control over financial reporting; and bringing actions and enforcing judgments under U.S. securities laws.

This list is not exhaustive of the factors that may affect any of the Company's forward-looking statements. Forward-looking statements are statements about the future and are inherently uncertain, and actual achievements of the Company or other future events or conditions may differ materially from those reflected in the forward-looking statements due to a variety of risks, uncertainties and other factors, including, without limitation, those referred to in the Company's Annual Information Form under the heading "Risk Factors" and in the Company's Annual Report on Form 40-F, and in the Company's other filings with Canadian and U.S. securities regulators. Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated, described or intended. Accordingly, readers should not place undue reliance on forward-looking statements.

The Company's forward-looking statements are based on the assumptions, beliefs, expectations and opinions of management as of the date of this news release, and other than as required by applicable securities laws, the Company does not assume any obligation to update forward-looking statements if circumstances or management's assumptions, beliefs, expectations or opinions should change, or changes in any other events affecting such statements. Assumptions may prove to be incorrect and actual results may differ materially from those anticipated. Consequently, guidance cannot be guaranteed. For the reasons set forth above, investors should not place undue reliance on forward-looking statements.

Additional information related to the Company, including Silvercorp's Annual Information Form, can be obtained under the Company's profile on SEDAR+ at www.sedarplus.ca, on EDGAR at www.sec.gov, and on the Company's website at www.silvercorpmetals.com.

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SOURCE Silvercorp Metals Inc

FAQ

What is the trading symbol for Silvercorp Metals Inc.?

The trading symbol for Silvercorp Metals Inc. is TSX: SVM on the Toronto Stock Exchange and NYSE American: SVM.

What is the off-market takeover offer for OreCorp Limited?

The off-market takeover offer for OreCorp Limited by Silvercorp comprises 0.0967 common shares of Silvercorp and A$0.19 cash per OreCorp share.

What is the status of the NYSE American approval for Silvercorp?

Silvercorp has submitted all requested documents to the NYSE American and anticipates conditional approval shortly.

What is the recommendation of the OreCorp Board regarding the Silvercorp Offer?

The OreCorp Board has provided a unanimous recommendation in favor of the Silvercorp Offer, in the absence of a superior proposal.

What is the current financial position of Silvercorp?

As of September 30, 2023, Silvercorp had cash and cash equivalents and short-term investments of US$189.1 million and an equity investment portfolio in associates and other companies with a total market value of US$124.0 million.

What is the potential benefit for OreCorp shareholders from the Silvercorp Offer?

The Silvercorp Offer provides OreCorp shareholders with the opportunity to be exposed to enhanced trading liquidity, re-rating potential, and participation in further upside from the Nyanzaga project and Silvercorp's existing portfolio.