- Silvercorp Metals (TSX:SVM) has closed its C$200 million acquisition of Adventus Mining (TSXV:ADZN), an Ecuador-focused copper-gold exploration and development company
- A feasibility study at Adventus’ El Domo deposit estimates a 10-year mine life averaging 10,463 tons per year (tpy) of copper and 21,390 tpy copper equivalent over the period
- Silvercorp is a Canadian mining company with ample growth potential and a long history of profitability producing silver, gold, lead and zinc in China
- Silvercorp Metals stock has added 25 per cent year-over-year and 19.39 per cent since 2019
Silvercorp Metals (TSX:SVM) has closed its C$200 million acquisition of Adventus Mining (TSXV:ADZN), an Ecuador-focused copper-gold exploration and development company.
The previously announced acquisition will see Adventus investors receive 0.1015 Silvercorp common shares for each Adventus share held, representing a 31 per cent premium on a 20-day volume-weighted average price basis.
Adventus shares will be delisted from the TSXV as soon as practicable, while the company’s president and chief executive officer, Christian Kargl-Simard, and Frances Kwong, chief financial officer and corporate secretary, will remain on staff as consultants to ensure a smooth operational transition.
What makes Adventus Mining an attractive acquisition?
Adventus holds the promise for significant shareholder value creation thanks to its majority-owned Curipamba copper-gold project, whose high-grade El Domo deposit is highlighted by:
- A completed feasibility study detailing proven and probable reserves of 6.5 million tons at 1.93 per cent copper, 2.52 grams per ton (g/t) of gold, 2.49 per cent zinc, 45.7 g/t silver and 0.25 per cent lead.
- A 10-year mine life averaging 10,463 tons per year (tpy) of copper and 21,390 tpy copper equivalent over the period.
- Production C1 cash costs of US$1.14 per pound (lb) and all-in sustaining costs of US$1.26/lb copper equivalent.
- Initial capital costs (including refundable VAT) of US$248 million with a payback period of 2.6 years and a net present value (8 per cent) of US$259 million, supposing US$3.50/lb copper, US$1,700 per ounce (oz) of gold, US$1.20/lb zinc, US$23/oz silver and US$0.95/lb lead.
Adventus also owns the Condor gold project, which boasts a more than 15-million-ounce indicated resource, a pair of Irish projects with demonstrated prospectivity, and a more than 135,000-hectare exploration portfolio ranking among the largest in Ecuador.
Silvercorp believes its US$200 million in cash and equivalents and Adventus’ US$175.5 million stream with Wheaton Precious Metals – in conjunction with its technical capabilities backed by having built eight mines in its current operations – will allow it to accelerate El Domo’s journey to production and pursue a stock re-rating.
About Silvercorp Metals
Silvercorp is a Canadian mining company with ample growth potential and a long history of profitability producing silver, gold, lead and zinc in China.
Silvercorp Metals stock (TSX:SVM) is down by 1.37 per cent, trading at C$5.05 per share as of 10 am ET. The stock has added 25 per cent year-over-year and 19.39 per cent since 2019.
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(Top photo of an Adventus Mining team member in Ecuador: Adventus Mining)
