Silvercorp Metals Inc. (“Silvercorp”) (TSX/NYSE
American: SVM) and
Guyana Goldfields Inc. (TSX:
GUY) (“Guyana Goldfields”) are pleased to announce that they have
entered into an amending agreement (the “Amending Agreement”) to
the arrangement agreement (the “Arrangement Agreement”) entered
into previously and announced on April 27, 2020, pursuant to which
Silvercorp agreed to acquire all of the issued and outstanding
shares of Guyana Goldfields by way of a court approved plan of
arrangement under the Canada Business Corporations Act (the
“Transaction”).
Pursuant to the terms of the Amending Agreement,
each holder of Guyana Goldfields shares will receive, for each
Guyana Goldfields share held, C$0.25 in cash and 0.1849 of a
Silvercorp common share, for total consideration of C$1.30 per
share (based on the volume weighted average price for Silvercorp
common shares for the 5 trading days ended May 14, 2020).
The terms of the Amending Agreement were agreed
following receipt by Guyana Goldfields of an unsolicited all-cash
proposal from a third party to acquire Guyana Goldfields.
As of the date of this news release, Silvercorp
holds 16,549,000 Guyana Goldfields shares, representing 9.48% of
the issued and outstanding common shares.
After accounting for Silvercorp’s existing
shares, the cash consideration of C$0.25 implies a total cash
component of C$39.5 million, and the share consideration of C$1.05
implies a total share component of 29.2 million shares. Based
on these metrics, this would translate into existing Guyana
Goldfields shareholders owning 14.4% of Silvercorp’s pro forma
basic shares outstanding following the Transaction.
Board of Directors’
Recommendations
The Amending Agreement has been unanimously
approved by the Board of Directors of Guyana Goldfields who
recommend that Guyana Goldfields shareholders vote in favour of the
Transaction. The Amending Agreement has also been unanimously
approved by the Board of Directors of Silvercorp.
Transaction Conditions and
Timing
Full details of the Transaction will be included
in the management information circular of Guyana Goldfields that is
expected to be mailed to Guyana Goldfields’ shareholders in early
June 2020. The Transaction will be subject to the approval of 66⅔%
of votes cast by shareholders of Guyana Goldfields at an annual and
special meeting of Guyana Goldfields shareholders scheduled for
June 29, 2020.
Commensurate with the increase in consideration,
valuing Guyana Goldfields at approximately C$227 million, the
Amending Agreement provides for an increase in the termination fee
to C$9.0 million, which is to be paid by Guyana Goldfields to
Silvercorp if the Arrangement Agreement is terminated in certain
specified circumstances. Other than as described herein, the terms
of the Transaction remain unamended, including the terms of the
interim loan facility.
None of the securities to be issued pursuant to
the Transaction have been or will be registered under the United
States Securities Act of 1933, as amended (the “U.S. Securities
Act”), or any state securities laws, and any securities issuable in
the Transaction are anticipated to be issued in reliance upon
available exemptions from such registration requirements pursuant
to Section 3(a)(10) of the U.S. Securities Act and applicable
exemptions under state securities laws. This press release does not
constitute an offer to sell or the solicitation of an offer to buy
any securities.
Shareholders who have questions regarding the
Transaction should contact Guyana Goldfields’ strategic shareholder
advisor and proxy solicitation agent Kingsdale Advisors at
1-800-775-1986, or collect call outside North America at
416-867-2272, or by e-mail
at contactus@kingsdaleadvisors.com.
About Silvercorp
Silvercorp is a profitable Canadian mining
company producing silver, lead and zinc metals in concentrates from
mines in China. The Company’s goal is to continuously create
healthy returns to shareholders through efficient management,
organic growth and the acquisition of profitable projects.
Silvercorp balances profitability, social and environmental
relationships, employees’ wellbeing, and sustainable
development.
About Guyana Goldfields
Guyana Goldfields Inc. is a Canadian based gold
producer primarily focused on the exploration, development and
operation of gold deposits in Guyana, South America.
For further information
Silvercorp Metals Inc.Lon Shaver Vice
PresidentPhone: (604) 669-9397Toll Free 1(888) 224-1881Email:
investor@silvercorp.caWebsite: www.silvercorp.ca |
Guyana Goldfields Inc.Annie SismanianVice
President, Corporate Finance & Investor RelationsPhone: (416)
933-5495Email: asismanian@guygold.comWebsite: www.guygold.com |
CAUTIONARY DISCLAIMER - FORWARD LOOKING
STATEMENTS
Certain of the statements and information in
this press release constitute “forward-looking statements” within
the meaning of the United States Private Securities Litigation
Reform Act of 1995 and “forward-looking information” within the
meaning of applicable Canadian provincial securities laws. Any
statements or information that express or involve discussions with
respect to predictions, expectations, beliefs, plans, projections,
objectives, assumptions or future events or performance (often, but
not always, using words or phrases such as “expects”, “is
expected”, “anticipates”, “believes”, “plans”, “projects”,
“estimates”, “assumes”, “intends”, “strategies”, “targets”,
“goals”, “forecasts”, “objectives”, “budgets”, “schedules”,
“potential” or variations thereof or stating that certain actions,
events or results “may”, “could”, “would”, “might” or “will” be
taken, occur or be achieved, or the negative of any of these terms
and similar expressions) are not statements of historical fact and
may be forward-looking statements or information.
Forward-looking statements or information relate to, among other
things: the price of silver and other metals; the accuracy of
mineral resource and mineral reserve estimates at the Company’s
material properties; the sufficiency of the Company’s capital to
finance the Company’s operations; estimates of the Company’s
revenues and capital expenditures; estimated production from the
Company’s mines in the Ying Mining District; timing of receipt of
permits and regulatory approvals; availability of funds from
production to finance the Company’s operations; and access to and
availability of funding for future construction, use of proceeds
from any financing and development of the Company’s properties.
Forward-looking statements or information are
subject to a variety of known and unknown risks, uncertainties and
other factors that could cause actual events or results to differ
from those reflected in the forward-looking statements or
information, including, without limitation, risks relating to:
global economic and social impacts of COVID-19; fluctuating
commodity prices; calculation of resources, reserves and
mineralization and precious and base metal recovery;
interpretations and assumptions of mineral resource and mineral
reserve estimates; exploration and development programs;
feasibility and engineering reports; permits and licenses; title to
properties; property interests; joint venture partners; acquisition
of commercially mineable mineral rights; financing; recent market
events and conditions; economic factors affecting the Company;
timing, estimated amount, capital and operating expenditures and
economic returns of future production; integration of future
acquisitions into the Company’s existing operations; competition;
operations and political conditions; regulatory environment in
China and Canada; environmental risks; foreign exchange rate
fluctuations; insurance; risks and hazards of mining operations;
key personnel; conflicts of interest; dependence on management;
internal control over financial reporting as per the requirements
of the Sarbanes-Oxley Act; and bringing actions and enforcing
judgments under U.S. securities laws.
This list is not exhaustive of the factors that
may affect any of the Company’s forward-looking statements or
information. Forward-looking statements or information are
statements about the future and are inherently uncertain, and
actual achievements of the Company or other future events or
conditions may differ materially from those reflected in the
forward-looking statements or information due to a variety of
risks, uncertainties and other factors, including, without
limitation, those referred to in the Company’s Annual Information
Form for the year ended March 31, 2019 under the heading “Risk
Factors”. Although the Company has attempted to identify
important factors that could cause actual results to differ
materially, there may be other factors that cause results not to be
as anticipated, estimated, described or intended.
Accordingly, readers should not place undue reliance on
forward-looking statements or information.
The Company’s forward-looking statements and
information are based on the assumptions, beliefs, expectations and
opinions of management as of the date of this press release, and
other than as required by applicable securities laws, the Company
does not assume any obligation to update forward-looking statements
and information if circumstances or management’s assumptions,
beliefs, expectations or opinions should change, or changes in any
other events affecting such statements or information. For
the reasons set forth above, investors should not place undue
reliance on forward-looking statements and information.
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