Canadian mining firm Silvercorp Metals has entered into a placement agreement with OreCorp, a gold developer, to provide an equity placement of $28 million Australian Dollars (approximately Sh46.7 billion) for the advancement of OreCorp’s Nyanzaga gold project in Mwanza, Tanzania.
Under this arrangement, OreCorp will issue 70.4 million shares to Silvercorp at a price of $0.40 Australian Dollars (about Sh666.7) per OreCorp share, as mentioned in a statement provided to the media.
The funds from the equity placement will be used to initiate resettlement activities as outlined in the relocation action plan, thereby facilitating the timely development of the Nyanzaga project.
OreCorp holds an 84 percent stake in the Nyanzaga Gold Project, which is slated to commence production in 2025. Following the completion of this placement, Silvercorp will hold approximately 15 percent of OreCorp’s total outstanding ordinary shares.
In a broader context, Silvercorp has also signed a binding scheme implementation deed to acquire fully paid ordinary shares of OreCorp, intending to create a diversified and high-growth precious metals company with a pro forma market capitalization of 960 million Australian Dollars (approximately Sh1.6 trillion).
Under the scheme, Silvercorp will acquire all fully paid ordinary shares of OreCorp not already held by itself or its associates. OreCorp shareholders are set to receive a cash portion along with Silvercorp common shares as part of the takeover offer.
Opinion: Silvercorp Metals’ investment in OreCorp’s Nyanzaga gold project showcases international interest and support for Tanzania’s mining sector. This partnership not only provides financial backing for project development but also signifies confidence in Tanzania’s resource potential and its mining regulatory environment.