- 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.
Join the discussion: Find out what everybody’s saying about this mining stock on the Silvercorp Metals Inc. Bullboard, and check out the rest of Stockhouse’s stock forums and message boards.
The material provided in this article is for information only and should not be treated as investment advice. For full disclaimer information, please click here.
(Top photo of an Adventus Mining team member in Ecuador: Adventus Mining)