Silvercorp Metals Inc. (TSX: SVM, NYSE American: SVM) has announced a definitive arrangement agreement to acquire all issued and outstanding common shares of Adventus Mining Corporation (TSXV: ADZN, OTCQX: ADVZF) in a transaction valued at approximately C$200 million on a fully-diluted in-the-money basis. Under the terms of the agreement, Adventus shareholders will receive 0.1015 of a Silvercorp common share for each Adventus share they own, equating to C$0.50 per Adventus share. This exchange ratio represents a 31% premium based on the 20-day volume-weighted average prices of both companies’ shares as of April 25, 2024.

Significant Benefits and Future Growth Opportunities

This acquisition marks a significant step for Silvercorp, offering immediate asset diversification and expanding its geographic and metal exposure, particularly in the low-carbon future metals such as silver, copper, lead, and zinc. The addition of the high-margin, advanced El Domo project in Ecuador is expected to significantly enhance Silvercorp’s production profile in the near term. This project is bolstered by an Investment Protection Agreement with the Ecuadorian government, key permits including environmental and tailings storage, and existing funding mechanisms that will fully cover construction costs.

Dr. Rui Feng, Chairman and CEO of Silvercorp, commented on the acquisition: “This transaction will create a new globally diversified green metals producer. It presents the opportunity for us to leverage our technical expertise and strong balance sheet to unlock value for all shareholders by constructing the El Domo project.”

Adventus’ Strategic Advantages Post-Acquisition

For Adventus shareholders, the transaction offers a substantial immediate premium and continued exposure to Silvercorp’s robust mining operations and financial health. The deal de-risks the development of the El Domo project by leveraging Silvercorp’s established project construction capabilities and its access to crucial equipment supply chains, potentially lowering construction costs.

Adventus President, CEO, and Director, Christian Kargl-Simard, stated: “I am very proud of the accomplishments of our entire Adventus team… Combining the companies positions us well to deliver on El Domo and our other projects in collaboration with the government, local communities, and all stakeholders.”

Regulatory Approvals and Final Steps

The transaction is expected to close following approval by Adventus shareholders and the satisfaction of customary closing conditions, including court approval. The board of directors of Adventus has unanimously recommended that shareholders vote in favor of the transaction. Financial advisories and legal opinions have been provided by Cormark Securities Inc. and Raymond James Ltd., affirming the fairness of the transaction from a financial perspective.

The acquisition of Adventus by Silvercorp could significantly alter the dynamics within the mining industry by creating a more diversified and geographically widespread company with enhanced capabilities in high-demand metals. This move is likely to set a strong foundation for future growth and stability in the increasingly competitive global mining sector.

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