Silvercorp Metals Inc. has entered into agreements to acquire a 70% interest in Chaarat ZAAV CJSC, which holds the Tulkubash and Kyzyltash gold projects in the Kyrgyz Republic, for $162 million. The transaction involves a Share Purchase Agreement with Chaarat Gold Holdings Limited and a Cooperation Agreement with the National Investment Agency under the President of the Kyrgyz Republic.
The acquisition grants Silvercorp control over fully permitted gold projects in the Tian Shan region, known for its mineral-rich geology. Upon closing, ZAAV will become a joint venture company with Kyrgyzaltyn, where Silvercorp will hold a 70% operating interest and Kyrgyzaltyn will retain a 30% free-carried interest. This structure aligns local partnership with international operational expertise.
Payment terms are structured with $70 million allocated to the National Investment Agency in staged payments tied to government waivers and license extensions, while Chaarat will receive $92 million conditional on receipt of the Kyrgyz Government waiver. The company confirmed this waiver has been issued, allowing Silvercorp to proceed toward closing the transaction. Additional details about the transaction are available in the full press release at https://ibn.fm/Xz2rU.
This acquisition represents a significant expansion for Silvercorp beyond its traditional silver, lead, and zinc production into gold mining. The company describes its strategy as focusing on generating free cash flow from long-life mines while pursuing organic growth through drilling and strategic mergers and acquisitions. The Kyrgyz projects fit this model as permitted assets with development potential.
The transaction has implications for the mining industry in Central Asia, where international companies are increasingly seeking partnerships with local entities. The cooperation with Kyrgyzaltyn, a state-owned enterprise, demonstrates a model for foreign investment in the region's resource sector. For investors, the move diversifies Silvercorp's commodity exposure and geographic footprint while potentially unlocking value through development of the gold projects.
Silvercorp's commitment to responsible mining and ESG principles will likely extend to these new operations, addressing growing investor focus on sustainable resource extraction. The company maintains a newsroom for updates at https://ibn.fm/SVM where stakeholders can follow developments. The broader mining communications landscape includes platforms like MiningNewsWire, which provides specialized coverage of global mining developments through various distribution channels.
For the Kyrgyz Republic, the investment represents foreign capital inflow and potential economic development through resource extraction. The staged payment structure tied to government approvals creates alignment between regulatory compliance and financial transactions. This acquisition comes as global gold prices remain elevated, making gold projects increasingly attractive to mining companies seeking to expand their portfolios.
The transaction positions Silvercorp to potentially increase its production profile and revenue streams once the Kyrgyz projects advance toward production. The company's experience operating mines could accelerate development timelines compared to less experienced operators. This strategic move demonstrates how mid-tier mining companies are actively pursuing growth opportunities through targeted acquisitions in promising geological regions.
