Silvercorp Metals amends deal for Guyana Goldfields
Silvercorp Metals is...
Silvercorp Metals has announced an agreed amendment to its offer to acquire Guyana Goldfields, which it first detailed last month.
Silvercorp Metals is a Canadian mining company producing silver, lead and zinc metals from mines in China, while Guyana Goldfields, also Canadian, is focused on gold deposits in Guyana, South America.
Silvercorp Metals outlined their extensive rationale for the initial transaction. Firstly, it is to create a leading precious metals producer which will benefit from the diversification inherent to the deal. The move was also said to shore up the financial position of the companies, giving them the capital to develop the Aurora Underground Project in Guyana. Other projects in the pipeline include the BYP gold project in China, with the acquisition also meaning exploration possibilities will be improved, with priority brownfield and greenfield exploration targets within a 1,200 km2 land package in Guyana.
Also emphasised were the synergies of the two organisations such as underground mining skills and Guyana Goldfield’s experience in Guyana.
Rui Feng, Chairman and CEO of Silvercorp, said: “This transaction will create a new globally diversified precious metals producer with the addition of Aurora to our growing asset portfolio. We believe this is a rare opportunity to leverage our underground mining expertise and strong balance sheet to unlock value for all shareholders through the development of the Aurora Underground Project as well as aggressive exploration programs in a proven gold district.
“We look forward to partnering with the Government of Guyana to make a successful entry into the region, leveraging Guyana Goldfield’s existing team and relationships to ensure a smooth transition and continued development that benefits all stakeholders.”
Alan Pangbourne, President and CEO of Guyana Goldfields, said: “This transaction provides our shareholders with an immediate and significant upfront premium and exposure to a geographically diverse mid-tier precious metal company. With a strong operating history, solid balance sheet and significant underground experience, Silvercorp’s management team is well-positioned to fund and continue to advance the underground project at Aurora.”
The move was prompted by an all-cash offer from a third party, with Silvercorp shoring up its proposal with an improved offer
Zimbabwe targets £8.8bn mining industry by 2023
Zimbabwe’s government plans to fast-track exploration, evaluation and digitalisation of selected reserved mining areas under the Ministry of Mines and Mining Development as part of wider measures to achieve a £8.8 billion mining industry by 2023, according to a senior government minister.
Information Minister Monica Mutsvangwa said other plans include stopping the issuance of special grants in the reserved areas under the Ministry of Mines and Mining Development until the exploration and evaluation is complete and a robust value addition program for diamonds is implemented.
Mutsvangwa was speaking at a post-cabinet media briefing on December 15.
She adds that the issuance and renewal of special grants for energy should also be based on the financial and technical capacity to value add all types of coal, as well as for ideal exploration of Coal Bed Methane.
For renewal of special grants, consideration should take into account the period the Special Grant has been held as well as plans with milestones for value addition of the special grant, Mutsvangwa says. She adds that the Zimbabwean government expects gold to drive the mining sector in order to achieve the ambitious target, with the precious metal expected to contribute approximately £2.96 billion to the overall target.
Mining is one of Zimbabwe’s major contributors to its economy, alongside agriculture, which is the mainstay. The mining sector accounted for more than 60 percent of the country’s foreign currency receipts in 2019, and contributed around 16 percent to national Gross Domestic Product, the Chamber of Mines says.
The country’s mining industry is focused on a diverse range of small to medium mining operations. The most important minerals produced in Zimbabwe include gold, asbestos, chromite, coal and base metals.
Zimbabwe expects its economy to expand by 7.4 percent in 2021 from a projected contraction of 4.5 percent this year, due to the effects of drought and the COVID-19 global pandemic.
When presenting the 2021 National Budget in November this year, Finance and Economic Development Minister, Professor Mthuli Ncube, said that the mining sector is projected to rebound by 11 percent next year after surviving a COVID-19 induced shock that saw the sector contract by 4.7 percent in 2020. In September, mining bans in national parks were introduced, according to news agencies.
He added that the National Budget would allocate £1 billion towards the operations of the ministry for planning, promotion and exploration, data capturing, and automation, among other key mining processes.
Other factors necessary for the achievement of the £8.8 billion target include a stable macroeconomic environment, policy consistency, and availability of long-term capital to fund mining projects along the entire mineral value chain, the minister said.
Stopping "illicit financial flows" from gold smuggling is another key issue to address, according to media reports.