Silvercorp Metals Inc. has completed the acquisition of Chaarat ZAAV CJSC following a $92 million payment to Chaarat Gold Holdings Limited and the Kyrgyz government's waiver of its statutory pre-emptive right. The transaction establishes a joint venture between Silvercorp and Kyrgyzaltyn, a wholly owned subsidiary of the Kyrgyz Republic, with Silvercorp holding a 70% operating interest and Kyrgyzaltyn holding a 30% free-carried interest.
The joint venture will apply to extend the mining license for the Tulkubash and Kyzyltash gold projects from June 25, 2032 to June 25, 2062. Following this extension, Silvercorp will make a $60 million payment to the National Investment Agency under the President of the Kyrgyz Republic. This acquisition represents a significant expansion of Silvercorp's gold portfolio and demonstrates the company's ongoing merger and acquisition efforts to unlock value, as outlined in its corporate strategy.
The importance of this transaction extends beyond corporate growth to geopolitical and economic implications. The establishment of a joint venture with a state-owned entity in Kyrgyzstan represents a strategic partnership that could influence foreign investment patterns in Central Asia's mining sector. For the global mining industry, this deal highlights continued interest in gold assets despite market volatility, with companies seeking long-life projects that can generate free cash flow over decades.
For investors, the acquisition provides Silvercorp with additional gold exposure to complement its existing silver, lead, and zinc production. The extended license period to 2062 offers long-term visibility for the Tulkubash and Kyzyltash projects, potentially creating sustained shareholder value through what the company describes as "long life mines" with organic growth potential through extensive drilling. The joint venture structure also mitigates political risk through partnership with a government entity, a consideration increasingly important in emerging market mining operations.
The transaction's completion follows Silvercorp's previously disclosed share purchase agreement and demonstrates the company's execution capability in complex international transactions. As a Canadian mining company with a history of profitability, Silvercorp's expansion into Kyrgyzstan represents both geographic diversification and commodity diversification within its portfolio. The company maintains its commitment to responsible mining and ESG principles, which will be particularly relevant in developing the Kyrgyz assets.
Additional information about Silvercorp Metals is available through the company's newsroom at https://ibn.fm/SVM. The original press release announcing the acquisition completion can be viewed at https://ibn.fm/iuDnR. MiningNewsWire, which disseminated the announcement, provides specialized communications for the global mining sector as part of the Dynamic Brand Portfolio at IBN, with more information available at https://www.MiningNewsWire.com.
