VANCOUVER, BC, Oct. 19, 2022 /CNW/ - Minco Silver
Corporation (the "Company" or "Minco Silver")
(TSX: MSV) (OTCQX: MISVF) (WKN: A0ESX5) is pleased to announce that
it has entered into a transfer agreement to acquire a stake in
Sichuan Hexie Shuangma Co., Ltd. ("Hexie"), one of the largest
cement manufacturing companies in China and the owner of several limestone
mines.
Under the transfer agreement, the Company, through its wholly
owned subsidiary, Minco Mining (China) Co., Ltd. ("Minco China"), will acquire
an interest in the Tianjin Saikehuan Enterprise Management Center
Limited Partnership (the "Saikehuan LP") from Tianjin Huaxin Anneng
Management Consulting Partnership LP ("Huaxin") for RMB 119,762,699 (CAD$23.04
million) in cash. Hexie currently has 763,360,918
outstanding shares, and an estimate total market capitalization of
RMB 15.8 billion. The Saikehuan LPs
primary asset is an approximately 25% stake in Hexie (a total of
190,977,024 shares). The Company's stake in the Saikehuan LP gives
it an indirect interest in approximately 7,480,937 shares of Hexie
(the "Hexie Shares"), or 0.98% of Hexie's total outstanding shares.
The preliminary agreement was negotiated between the Company and
Huaxin on an arms-length basis.
The purchase price was funded exclusively from Minco Silver's
surplus working capital, and represents an opportunity to earn a
greater return than through traditional banking investments. The
Company did not anticipate requiring this capital for other
purposes in the foreseeable future.
In conjunction with the proposed acquisition, Minco China has
also entered into a restructuring and distribution agreement with
Saikehuan LP and its general partner pursuant to which the parties
will use their best efforts to restructure the Saikehuan LP to
initiate Minco China as a direct holder of the Hexie Shares with
the right to trade those shares directly on behalf of the Saikehuan
LP. Under the terms of this restructuring agreement, the Company
will be entitled to recoup its entire purchase price from the
proceeds of any sale of Hexie shares. Once the purchase price has
been recouped in full, all remaining proceeds will be divided as to
20% to the general partner, with the remaining 80% distributed to
Minco China.
The above transaction has been approved by Minco Silver's board
and Toronto Stock Exchange.
SOURCE Minco Silver Corporation