• Silvercorp offers to acquire all OreCorp Shares it does not already own for A$0.19 cash plus 0.0967 Silvercorp shares per OreCorp Share (the same consideration offered under the Scheme of Arrangement this offer is replacing)
• Off-market takeover offer subject only to a 50.1% minimum acceptance condition (and other customary conditions)
• Implied value of A$0.589¹ per OreCorp share represents a:
  • 40% premium to OreCorp’s 20-day VWAP ending August 4, 2023
  • 22% premium to OreCorp’s 20-day VWAP ending December 22, 2023
• The OreCorp Board is unanimously recommending OreCorp shareholders ACCEPT the Offer in the absence of a Superior Proposal

Silvercorp Metals Inc.  (TSX: SVM) (NYSE American: SVM) and OreCorp Limited (ASX: ORR) have entered into a Bid Implementation Deed, pursuant to which Silvercorp has agreed to acquire, by means of an off-market takeover offer, all of the OreCorp Shares not already owned by Silvercorp for consideration comprising 0.0967 common shares of Silvercorp and A$0.19 cash per OreCorp Share, currently equivalent to A$0.589¹ per OreCorp Share.

Under the BID, Silvercorp and OreCorp have provided undertakings to each other to facilitate the Transaction. The Offer is subject to minimal conditions, including:

• Silvercorp having a relevant interest in at least 50.1% of the OreCorp Shares;
• no regulatory action which could reasonably be expected to restrain, impede or prohibit the Offer and completion of the Transaction;
• no OreCorp material adverse change or prescribed occurrence (both terms defined in a customary manner); and
• normal course listing approval for the new Silvercorp Shares to be issued

The OreCorp Board is unanimously recommending that OreCorp shareholders ACCEPT the Offer subject to their Independent Expert’s Report concluding, and continuing to conclude, that the Offer is reasonable to OreCorp shareholders and there being no Superior Proposal². Subject to those same qualifications, the OreCorp Board, who collectively hold 3.94% of the OreCorp Shares, intend to accept the Offer in respect of all OreCorp Shares they own or control.

Silvercorp’s Chairman and CEO, Dr. Rui Feng, said: “We are pleased to adjust our Transaction with OreCorp after it became clear that the previously proposed Scheme, due to outside interference, was at risk of not completing. Our Offer is subject to a very limited number of conditions. Silvercorp obtained the required approval of the Tanzania Fair Competition Commission (“FCC”) approximately two months after the application was submitted.  Even if an alternative proposal is made, there is uncertainty as to whether it would be successful in receiving similar FCC approval. Accordingly, our Offer provides OreCorp Shareholders with the opportunity to receive the Consideration in a timely manner. I encourage all OreCorp Shareholders to read the forthcoming Bidder’s Statement for more details about the Offer and accept the Offer as soon as possible.”

This Transaction aims to create a globally diversified precious metals producer, and will provide enhanced trading liquidity, re-rating potential and the opportunity to participate in further upside from the Nyanzaga Project and Silvercorp’s existing mining portfolio to shareholders of both companies. Silvercorp is well-positioned to fund and immediately move to advance Nyanzaga towards commercial production.

The development of the Nyanzaga Project is also subject to regulatory and jurisdiction risks in Tanzania. For example, the Government of Tanzania (through the Treasury Registrar) currently holds a 16% non-dilutable free carried interest (the Free Carried Interest Shares) in the share capital of Sotta Mining Corporation Limited (SMCL). In addition, the Government of Tanzania has a right to acquire, in total, up to 50% of the share capital of SMCL, determined by the total value of the tax expenditures enjoyed by SMCL. However, relevant legislation also provides that the Government of Tanzania agrees and undertakes that any increase in ownership or economic participation rights by the Government of Tanzania in addition to the 16 percent Free Carried Interest Shares will be by agreement between the parties, and that the Government of Tanzania will not unilaterally seek to increase such ownership or economic participation rights.

Silvercorp has designed, permitted and constructed multiple mining and processing facilities, requiring it to establish and maintain constructive relationships with diverse stakeholders, including communities, regulators, and various levels of government. Silvercorp looks forward to bringing its philosophy of openness, transparency and cooperation in its future dealings with the Government of Tanzania to facilitate the prompt development of Nyanzaga for the benefit of all involved.

Additional Details

The BID Deed includes market standard deal protection measures equivalent to those previously agreed under the Scheme, including “no talk” and “no due diligence” provisions (subject to a fiduciary out exception) and “no shop”. It also includes notification and matching rights for Silvercorp in the event of a competing proposal. Pursuant to these deal protection measures, OreCorp has agreed, inter alia that it will not solicit, encourage or initiate any competing proposal and further, that it will not participate in any discussions or negotiations with a third party in relation to any competing proposal (unless certain conditions are satisfied, including where a failure to do so would constitute a breach of the OreCorp Board’s fiduciary duties or statutory obligations).

As with the Scheme, under certain circumstances a break fee of approximately A$2.8 million will be payable by OreCorp to Silvercorp if the BID is terminated.

The Offer is not subject to the approval of the Silvercorp’s shareholders and is not subject to any financing or due diligence conditions.

As of the date of this announcement, Silvercorp holds 73,889,007 OreCorp Shares, representing 15.74% of the fully paid ordinary shares of OreCorp.

Next Steps

Further detail regarding the Offer will be provided in Silvercorp’s Bidder’s Statement and OreCorp’s Target’s Statement, which are expected to be despatched shortly. The Bidder’s and Target’s Statements will set out important information, including how to accept the Offer and the key reasons why OreCorp shareholders should accept the Offer. The Target’s Statement will include an Independent Expert’s Report prepared by BDO Corporate Finance (WA) Pty Ltd.

Termination of the Scheme Implementation Deed

In conjunction with the execution of the Bid Implementation Deed, Silvercorp and OreCorp have mutually agreed to terminate the Scheme Implementation Deed dated August 5, 2023 (as amended and restated on November 23, 2023) (“SID”, or “Scheme”), with effect from today. Accordingly, OreCorp is seeking orders from the Federal Court of Australia that the Scheme meeting of OreCorp shareholders proposed for January 18, 2024 no longer be held.

Advisors and Counsel

Canaccord Genuity Corp. is acting as financial advisor to Silvercorp. King & Wood Mallesons, Australia is acting as Silvercorp’s Australian legal advisor.

OreCorp shareholders who have questions regarding the Offer should call the Silvercorp Information Line on 1300 290 691 (within Australia) of +61 2 9066 4081 (outside Australia) between 9:00am and 5:30pm (Sydney time) Monday to Friday, excluding public holidays in Sydney.

About Silvercorp

Silvercorp is a Canadian mining company producing silver, gold, lead, and zinc with a long history of profitability and growth potential. The Company’s strategy is to create shareholder value by 1) focusing on generating free cashflow from long life mines; 2) organic growth through extensive drilling for discovery; 3) ongoing merger and acquisition efforts to unlock value; and 4) long term commitment to responsible mining and ESG.