Silvercorp Metals Inc. has entered into agreements to acquire a 70% interest in Chaarat ZAAV CJSC, which holds the Tulkubash and Kyzyltash gold projects in the Kyrgyz Republic, for $162 million in cash. The transaction involves a Share Purchase Agreement with Chaarat Gold Holdings Limited and a Cooperation Agreement with the National Investment Agency under the President of the Kyrgyz Republic.
This acquisition is significant as it represents Silvercorp's strategic expansion into gold mining through fully permitted projects in the resource-rich Tian Shan region. Upon closing, ZAAV will be converted into a joint venture company with Kyrgyzaltyn, where Silvercorp will hold a 70% operating interest and Kyrgyzaltyn will retain a 30% free-carried interest. The structured payment arrangement includes $70 million in staged payments to the National Investment Agency tied to government waivers and license extensions, while Chaarat will receive $92 million conditional on receipt of the Kyrgyz Government waiver, which has now been issued.
The importance of this development lies in Silvercorp's execution of its growth strategy, which includes ongoing merger and acquisition efforts to unlock value. By acquiring these gold projects, the Canadian mining company diversifies its production beyond silver, lead, and zinc into gold, potentially enhancing shareholder value through additional revenue streams. The joint venture structure with local state interests also demonstrates a commitment to responsible mining and environmental, social, and governance principles through partnership with national entities.
For investors and the mining industry, this transaction highlights continued interest in Central Asian mineral resources and the potential for established mining companies to expand through strategic acquisitions. The Kyrgyz Republic's approval of the waiver indicates governmental support for foreign investment in its mining sector, which could encourage further development in the region. The full details of the announcement are available in the company's official release at https://ibn.fm/Xz2rU.
Silvercorp's newsroom provides ongoing updates about the company at https://ibn.fm/SVM. This acquisition represents a substantial investment in gold projects that are already permitted, reducing regulatory uncertainty and potentially accelerating production timelines compared to exploration-stage assets.
