Canadian company Silvercorp Metals Inc. reported that it has signed 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.
As reported, pursuant to these agreements, the company will acquire a 70 percent interest in Chaarat ZAAV CJSC, which holds a 100 percent interest in the mining license (about 7 square kilometers) hosting the fully-permitted Tulkubash and Kyzyltash gold projects as well as surrounding exploration licenses (27.42 square kilometers) hosting Karator and Ishakuldy gold zones located in the Tian Shan area of the Kyrgyz Republic for cash consideration of $162 million.
Additionally, the company, through its wholly-owned subsidiaries, entered into a Share Purchase and Shareholders Agreement with Kyrgyzaltyn OJSC. This agreement states that upon completion of the acquisition of Chaarat ZAAV, it will be converted into a joint venture company (JVC) between Silvercorp and Kyrgyzaltyn. Silvercorp will hold a 70 percent interest and be the operator of the JVC and Kyrgyzaltyn will hold a 30 percent free-carried interest.
As part of the Cooperation Agreement, the National Investment Agency will receive $70 million cash in two staged payments:
1) payment of $60 million upon the Kyrgyz Government issuing a waiver of its statutory pre-emptive right on the projects and an extension of the validity period of the JVC’s mining license from June 25, 2032 to June 25, 2062;
2) $10 million cash payment after certain other milestones are achieved.
Per the Share Purchase Agreement, Chaarat will receive a $92 million cash payment from Silvercorp conditional upon receipt of the Kyrgyz Government waiver.
The JVC envisages a two-phase development plan for the Tulkubash and Kyzyltash gold projects per the Cooperation Agreement and the Shareholders Agreement:
Phase 1. Development of Tulkubash (2026-2028)
Silvercorp will commit to invest $150 million for construction of a 4 million tons of ore per year open-pit mine/heap leach operation for the oxidized gold ore from the Tulkubash field. Once in production in 2027-2028, the Tulkubash field is expected to produce approximately 110,000 oz of gold annually for 3-4 years. Additionally, if the Karator exploration license is converted into a mining license in 2026, the open pit/heap leach operation could be extended for at least 2 years.
Phase 2. Development of Kyzyltash (2028-2031)
Approximately $400 million in investment to develop the Kyzyltash sulfide deposit into a 3 to 4 million tons per year open pit/underground mine, plus flotation, bacterial oxidization (BIOX) and carbon in leach (CIL). Once in production, the Kyzyltash sulfide deposit could produce approximately 190,000 to 230,000 oz of gold annually for over 18 years, starting from 2031.
«We are pleased to develop these projects, the largest undeveloped gold deposits in the West Tien Shan gold belt. All interests are aligned for us to bring the projects into production. With our 20 years of mining expertise and financial strength, we are confident Silvercorp and Chaarat’s well-established local team can work with our Kyrgyz partner to advance ahead on the projects and unlock value for all stakeholders and shareholders,» Dr. Rui Feng, Silvercorp Chair and CEO said.
The company noted that the addition of the Tulkubash and Kyzyltash gold projects to Silvercorp’s portfolio aligns with its strategy of diversifying and growing asset base by adding a third jurisdiction and will position the company to benefit from gold’s strong fundamentals.
Note of 24.kg news agency
Silvercorp Metals Inc. is a Canadian mining company headquartered in Vancouver. Founded in 1991, its shares are traded on the Toronto Stock Exchange and NYSE American under the ticker symbol SVM.
Silvercorp’s primary operating assets are concentrated in China, where the company mines silver, as well as associated metals such as lead, zinc, and gold. Silvercorp is considered one of the largest foreign silver producers in China.
