Silvercorp Metals amends deal for Guyana Goldfields

Silvercorp Metals has announced an agreed amendment to its offer to acquire Guyana Goldfields, which it first detailed last month.

Silvercorp Metals is a Canadian mining company producing silver, lead and zinc metals from mines in China, while Guyana Goldfields, also Canadian, is focused on gold deposits in Guyana, South America.

Silvercorp Metals outlined their extensive rationale for the initial transaction. Firstly, it is to create a leading precious metals producer which will benefit from the diversification inherent to the deal. The move was also said to shore up the financial position of the companies, giving them the capital to develop the Aurora Underground Project in Guyana. Other projects in the pipeline include the BYP gold project in China, with the acquisition also meaning exploration possibilities will be improved, with priority brownfield and greenfield exploration targets within a 1,200 km2 land package in Guyana.

Also emphasised were the synergies of the two organisations such as underground mining skills and Guyana Goldfield’s experience in Guyana.

Rui Feng, Chairman and CEO of Silvercorp, said: “This transaction will create a new globally diversified precious metals producer with the addition of Aurora to our growing asset portfolio. We believe this is a rare opportunity to leverage our underground mining expertise and strong balance sheet to unlock value for all shareholders through the development of the Aurora Underground Project as well as aggressive exploration programs in a proven gold district.

“We look forward to partnering with the Government of Guyana to make a successful entry into the region, leveraging Guyana Goldfield’s existing team and relationships to ensure a smooth transition and continued development that benefits all stakeholders.”

Alan Pangbourne, President and CEO of Guyana Goldfields, said: “This transaction provides our shareholders with an immediate and significant upfront premium and exposure to a geographically diverse mid-tier precious metal company.  With a strong operating history, solid balance sheet and significant underground experience, Silvercorp’s management team is well-positioned to fund and continue to advance the underground project at Aurora.” 

The move was prompted by an all-cash offer from a third party, with Silvercorp shoring up its proposal with an improved offer