Photo credit: Celsius Resources
Celsius Resources is pleased to announce it has entered into a non-binding term sheet and a binding subscription agreement with Silvercorp Metals Inc., a Canadian-based mining company engaged in the acquisition, exploration, development and mining of mineral properties.
Highlights
Celsius Resources Limited has entered into a non-binding term sheet with Silvercorp Metals Inc. with the following non-binding terms:
- Silvercorp proposes to acquire all of the outstanding shares of CLA at a fixed price of A$0.03 per share in exchange for consideration comprising 90% Silvercorp shares + 10% cash.
- The consideration of A$0.030 (GBP0.016)1 per share represents a 76% premium to the 20-day volume weighted average price of Celsius shares as of the close of trading on the ASX on 11 May 2023 (86% premium by similar reference to the trading price on AIM). The implied value of the proposed acquisition (should it proceed) is approximately A$56 million (GBP 30.2 million)1. Using Silvercorp’s current share price of CA$4.64 (A$5.142)as of the close of trading of Silvercorp shares on TSX on 12 May 2023, the proposed acquisition will result in Silvercorp issuing approximately 9.7 million Silvercorp shares and A$5.6 million to the shareholders of Celsius.
- Concurrent to the proposed acquisition, should it proceed, it is anticipated that Celsius shareholders will, via an in specie distribution, receive shares in a new exploration company (the “SpinCo”) which will hold all of Celsius’ rights and interests with respect to the Sagay (Philippines) and Opuwo Cobalt (Namibia) projects via a demerger, subject to Celsius obtaining the necessary shareholder and regulatory approvals. Should the demerger proceed, the SpinCo shares are anticipated to be distributed on a 10 Celsius shares for 1 SpinCo share basis to Celsius shareholders, who taking into account the proposed investment into SpinCo referred to below, will hold approximately 87% of SpinCo. SpinCo will seek listing on the Australian Securities Exchange (“ASX”) or on AIM, a market operated by the London Stock Exchange, via the demerger and concurrent initial public offering. Silvercorp has agreed, under the non-binding term sheet, to invest A$4 million in SpinCo, valued at a post-financed market capitalisation of A$30 million.
- Additionally, Celsius and Silvercorp have executed a binding subscription agreement for A$5 million at a subscription price of A$0.015 (GBP 0.0081), to be primarily used as interim funding for its Maalinao-Caigutan-Biyog Copper-Gold Project (“MCB Project”) in the Philippines.
- Celsius and Silvercorp will now commence negotiations towards the execution of the necessary binding transaction documents and agreements which will implement the proposed acquisition.
About Silvercorp Metals, Inc.
Silvercorp Metals, Inc. is a Canadian mining company traded on the Toronto Stock Exchange (TSX: SVM) and the New York Stock Exchange (NYSE American: SVM). Silvercorp has been profitably mining underground silver, lead, zinc deposits in China for 17 years and engages in the acquisition, exploration and development of resource projects globally with a focus on the sustainable, profitable, and long-term production of precious and nonferrous metals such as silver, gold, lead, and zinc. Its long-term strategy is focused on expanding mineral reserves, streamlining mine production management, achieving sustainable development, and seeking mutually beneficial opportunities globally.
Through the years, it has successfully driven rapid growth and solid silver, lead and zinc production with a demonstrated and proven commitment to Environment, Social, and Governance standards while creating value for its stakeholders and shareholders. Silvercorp has a market capitalisation of US$607million with a current share price as of 11 May 2023 on the TSX of CA$4.64, and the NYSE of US$3.44. As of 31 December 2022, Silvercorp’s balance sheet is at US$210.3 million in cash and cash equivalents and short-term investments. Silvercorp holds further equity investment portfolio in associates and other companies with a total market value of US$121.8 million. (See Silvercorp Metals, Inc. website, http://silvercorpmetals.com )
Management commentary
Julito Sarmiento, Executive Chairman of Celsius Resources commented:
“This a positive step and timely development for Celsius and its subsidiaries. We are happy to have received an offer from Silvercorp which shares Celsius’ corporate values and our vision to develop mining projects in a sustainable, inclusive and responsible manner. Together, we have the potential to demonstrate and realise our commitments to all our shareholders and stakeholders to see the development of Celsius’ mineral assets, particularly our flagship MCB Copper-Gold Project with the Balatoc Indigenous Community in Kalinga, Philippines, through fruition.
Indeed, this is a strong and favourable endorsement of the Philippines’ minerals industry under the Administration of President Ferdinand R. Marcos, Jr. in its unrelenting drive as spearheaded by the Department of Environment and Natural Resources under the stewardship of Secretary Ma. Antonia Yulo-Loyzaga, a globally-renowned climate change and disaster resilience expert, towards transformative mining that genuinely protects the environment and brings about shared prosperity for all stakeholders.”
The complete press release can be found HERE
