Australian firm nears Tanzania gold project acquisition

What you need to know:

  • OreCorp claims that before the offer closed on March 22, 2024, the Canadian mining company Silvercorp failed to meet the 50.1 percent minimum acceptance condition of their off-market takeover deal

Dar es Salaam. An Australian company, Perseus Mining Limited, is on the verge of securing the acquisition of Tanzania’s Nyanzaga Gold Project from OreCorp following the expiry of a rival bid from Canadian company Silvercorp Metals.

According to OreCorp, the Canadian mining firm Silvercorp did not satisfy the 50.1 percent minimum acceptance condition of its off-market takeover bid before the close of the offer on March 22, 2024.

Both Perseus and Silvercorp Metals have been engaged in a bidding war for OreCorp’s acquisition, with interests in gaining control of OreCorp’s Nyanzaga gold project in Tanzania.

Perseus and Silvercorp have vied for months to acquire the Africa-focused gold explorer, which last week saw Perseus raise its cash offer to 0.575 Australian dollars a share.

The figure, representing a 4.5 percent increase over its previous bid of 0.55 Australian dollars, had been originally turned down by OreCorp earlier this year.

However, before Perseus’s revised offer, Silvercorp Metals had already entered into a Bid Implementation Deed with OreCorp.

Under this agreement, Silvercorp proposed acquiring all OreCorp shares for a combination of 0.19 Australian dollars in cash and 0.0967 Silvercorp shares per OreCorp share.

In an announcement issued on March 25, 2024, per the terms of the Bid Implementation Deed between OreCorp and Silvercorp dated December 27, 2023 (BID), OreCorp has provided Silvercorp with notice of termination of the bid.

“Silvercorp will remain entitled to payment of a break fee of approximately $2.8 million in certain circumstances, as set out in the bid,” Silvercorp Metals said in their issued statement.

In 2021, OreCorp, the target of the acquisition, was granted a special mining license to develop the Nyanzaga gold project in the Lake Victoria Goldfields of north-west Tanzania, a license for which the company had applied in 2017.

The Nyanzaga project would necessitate a pre-production capital cost of $474 million, covering expenses such as underground development, open pit pre-strip, plant, and related project infrastructure.

The Nyanzaga Project is an advanced development project in the Archaean Greenstones of the Lake Victoria Goldfields in northwest Tanzania.