Silvercorp Metals Inc. (TSX: SVM) (NYSE American: SVM) announced the completion of its acquisition of Chaarat ZAAV CJSC, a pivotal move that secures the company's foothold in the Kyrgyz Republic's gold mining sector. The transaction, which involved a $92 million payment to Chaarat Gold Holdings Limited, followed the Kyrgyz government's issuance of a waiver of its statutory pre-emptive right, clearing the path for the acquisition.
Under the terms of the share purchase agreement, Silvercorp will convert ZAAV into a joint venture company with Kyrgyzaltyn, a wholly owned subsidiary of the Kyrgyz Republic. Silvercorp will hold a 70% operating interest, while Kyrgyzaltyn will retain a 30% free-carried interest. The joint venture will immediately seek to extend the mining license for the Tulkubash and Kyzyltash gold projects from June 25, 2032, to June 25, 2062. Upon license extension, Silvercorp will make a $60 million payment to the National Investment Agency under the President of the Kyrgyz Republic, as detailed in the full press release.
This acquisition is strategically important for Silvercorp, a Canadian mining company with a long history of profitability and growth potential. The company's strategy focuses on generating free cash flow from long-life mines, organic growth through extensive drilling, ongoing merger and acquisition efforts, and a commitment to responsible mining and ESG principles. The Tulkubash and Kyzyltash gold projects represent significant additions to Silvercorp's portfolio, offering substantial reserves and the potential for increased production.
The joint venture structure with Kyrgyzaltyn ensures local partnership and compliance with Kyrgyz regulations, while the extended license period provides long-term operational stability. This move positions Silvercorp to unlock value from these assets, contributing to its goal of creating shareholder value through disciplined capital allocation and operational excellence.
Investors and stakeholders can find the latest news and updates relating to SVM in the company's newsroom at https://ibn.fm/SVM. The completion of this acquisition marks a significant milestone for Silvercorp, enhancing its presence in Central Asia and strengthening its portfolio of precious metal assets.
