Silvercorp to acquire Adventus in $200 million deal
Silvercorp Metals Inc. [SVM-TSX, NYSE], a company with operations in China, has struck a definitive deal to acquire Adventus Mining Corp. [ADZN-TSXV, ADVZF-OTCQX] by way of a plan of arrangement worth $200 million.
Under the agreement, each holder of common shares of Adventus will receive 0.1015 of one Silvercorp common share in exchange for each Adventus share. The exchange ratio implies a consideration of 50 cents per Adventus share.
This represents a premium of 31% based on the 20-day volume weighted average price of Silvercorp on the TSX and Adventus on the TSX Venture Exchange on April 25, 2024.
Adventus shares rose 7.1% or $0.3 to 45 cents on volume of 1.83 million. The shares previously traded in a 52-week range of 46 cents and 22 cents. Silvercorp shares eased 4.7% or 23 cents to $4.61 in early trading, Friday.
“This transaction will create a new globally diversified green metals producer,’’ said Silvercorp Chairman and CEO Dr. Rui Feng.
Silvercorp is a Canadian mining company producing silver, lead and zinc metals in concentrates from mines in China.
Silvercorp has said five of its mines in two Chinese provinces have been certified as “green mines.”
Back in November 2023, Adventus agreed to acquire all of the issued and outstanding shares of Luminex Resources Corp. via a share exchange deal.
The transaction was designed to create a combined company that aimed lead the advancement of the El Domo-Curipamba copper-gold project towards production and consolidate a large and prospective gold-copper development and exploration portfolio in Ecuador covering over 135,000 hectares, including the preliminary economic-stage (PEA) Condor gold-copper project.
The 98.7%-owned Condor project is adjacent to Lundin Gold Inc’s [LUG-TSX, Nasdaq Stockholm] Fruta del Norte and Tongling/China Rail’s Mirador project.
The combined company brought together the support of members of Beaty’s Lumina Group, local Ecuadorian investors and strategic and equity investors that include Altius Minerals Corp. [ALS-TSX, ATUSF-OTCQX] and Wheaton Precious Metals Corp. (WPM-TSX, WPM-NYSE).
At the time of the deal, Altius was Adventus’s largest shareholder. Beaty was expected to hold 13% of the combined company after the transaction and concurrent financing is complete.
Back in January, 2022 Adventus and Salazar Resources Ltd. [SLR-TSXV] secured US$235.5 million for development of the Curipamba Copper Project via financing deals with Wheaton Precious Metals and Trafigura Pte Ltd.
On Friday Silvercorp outlined the benefits of the Adventus deal, saying it de-risks the development of El Domo by leveraging Silvercorp’s technical capabilities and history of successful project construction.
It said Adventus’s PEA stage Condor asset provides further optionality and upside. The PEA for Condor North highlighted a 12-year mine life with average annual production of 187,000 ounces of gold and 758,000 ounces of silver at a by-product all-in-sustaining cost of US$839 per ounce over the life of the mine.
Indicated mineral resources for the asset stand at 2.3 million ounces of gold and 12.8 million ounces of silver.