Dr. Rui Feng of Silvercorp reports

SILVERCORP TO ACQUIRE ADVENTUS, CREATING A GEOGRAPHICALLY DIVERSIFIED MINING COMPANY BY ADDING THE ADVANCED EL DOMO PROJECT

Silvercorp Metals Inc. and Adventus Mining Corp. have entered into a definitive arrangement agreement, pursuant to which Silvercorp has agreed to acquire all of the issued and outstanding common shares of Adventus by way of a plan of arrangement.

Under the terms of the arrangement agreement, each holder of the common shares of Adventus will receive 0.1015 of one Silvercorp common share in exchange for each Adventus share at the effective time of the transaction. The exchange ratio implies consideration of 50 cents per Adventus share based on the 20-day volume-weighted average prices (VWAP) of Silvercorp shares on the Toronto Stock Exchange on April 25, 2024. This represents a premium of 31 per cent based on the 20-day VWAP of Silvercorp on the TSX and Adventus on the TSX Venture Exchange, both as at April 25, 2024. The implied equity value of the transaction is approximately $200-million on a fully diluted in-the-money basis. At closing, existing Silvercorp and Adventus shareholders will own approximately 81.6 per cent and 18.4 per cent, respectively, of Silvercorp shares outstanding on a fully diluted in-the-money basis.

Strategic rationale for Silvercorp:

• Provides immediate asset, geographic and metal diversification:
  • Pro forma asset portfolio consists of exposure to China and Ecuador, increased gold exposure, as well as metals (silver, copper, lead and zinc) that are key for a low-carbon future.
• Addition of the high-margin, advanced El Domo project should significantly enhance Silvercorp's near-term production profile:
  • Investment protection agreement for the project in place with the government of Ecuador;
  • Key permits secured, including the environmental licence and tailings storage approval;
  • Existing $175.5-million (U.S.) stream with Wheaton Precious Metals International Ltd., combined with Silvercorp's existing cash and cash equivalents of approximately $200-million (U.S.), is more than sufficient to fully finance El Domo through construction;
  • Silvercorp has the technical capabilities to bring El Domo into production on an accelerated basis, having built eight mines in its current operations, along with three flotation mills of similar size to El Domo (with a new 1,500-tonne-per-day (tpd) flotation mill under construction at Ying), and three tailings storage facilities.
• Transaction is accretive on a net asset value per share, as well as on a mineral reserves and mineral resources, basis;
• Adventus's preliminary economic assessment (PEA)-stage Condor asset provides further optionality and upside, including:
  • 2021 PEA for Condor North highlighted a 12-year mine life with average annual payable production of 187,000 ounces (oz) of gold and 758,000 oz of silver at a byproduct all-in sustaining cost (AISC) of $839 (U.S.)/oz over the life of the mine;
  • Indicated mineral resources containing 2.3 million oz of gold and 12.8 million oz of silver, and inferred mineral resources containing 4.3 million oz of gold and 18.1 million oz of silver.
• Rerating opportunity resulting from increased scale, significantly enhanced growth profile and establishing a presence in an emerging, mining-friendly jurisdiction.

Dr. Rui Feng, Silvercorp chairman and chief executive officer, said:

"This transaction will create a new globally diversified green metals producer. It presents the opportunity for us to leverage our technical expertise and strong balance sheet to unlock value for all shareholders by constructing the El Domo project. We look forward to working with the government of Ecuador and local communities, as well as leveraging the existing Adventus and Curimining teams, to grow our business in Ecuador, which will generate sustainable economic, social and environmental value for all stakeholders.

"We would also like to acknowledge the hard work and contributions to the El Domo project by our future partners at Salazar Resources. Silvercorp will continue to work collaboratively with Salazar as El Domo is advanced into construction and ultimately operations."

Benefits for Adventus shareholders:

• Immediate and significant premium to Adventus shareholders of 31 per cent on a 20-day VWAP basis;
• Exposure to Silvercorp's high-quality and profitable silver mines, strong balance sheet, and record of returning capital to shareholders, while retaining participation in future upside from El Domo, Condor and Adventus's exploration portfolio;
• Derisks development of El Domo by leveraging Silvercorp's technical capabilities and financial strength, its history of successful project construction, and its in-depth access to equipment supply chains that could result in cost-savings for El Domo construction;
• Potential for a further premium through a rerating of Silvercorp shares as El Domo is advanced to production;
• Option to realize cash proceeds given trading liquidity of Silvercorp shares (approximately $8-million (U.S.) per day on the Toronto Stock Exchange and NYSE American);
• Continued commitment to best-in-class ESG (environmental, social and governance) practices by Silvercorp, which has an ESG rating of A from MCSI, as well as EMS ISO 14001 and ISO 45001 certifications across its operations.

Christian Kargl-Simard, Adventus's president, chief executive officer and director, said:

"I am very proud of the accomplishments of our entire Adventus team, together with Salazar Resources and other partners, since 2017, highlighted by the advancement of El Domo from an inferred resource to the construction-ready project that it is today and the consolidation of our significant exploration portfolio in Ecuador. Our commitment to, and public record of transparency, technical excellence, environmental stewardship and the highest standards of social responsibility have been the backbone of our success. I believe that Silvercorp strongly shares our values, in addition to bringing financial strength and experience from global operations. Combining the companies positions us well to deliver on El Domo and our other projects in collaboration with the government, local communities and all stakeholders."

About the El Domo project

The advanced high-grade copper-gold El Domo project, 75 per cent owned by Adventus, covers approximately 172 hectares with a buffer of 118 hectares (2.9 square kilometres in total). El Domo is located in central Ecuador, approximately 150 km northeast of the major port city of Guayaquil -- about a three-hour drive. The project spans low-lying hills and plains between 300 m and 900 m above sea level.

In 2017, Adventus entered into an agreement with Salazar Resources Ltd., pursuant to which Adventus earned its majority interest in the Curipamba project by financing exploration and development expenditures of $25-million (U.S.) over five years, and meeting certain development obligations. In 2021, Adventus announced it had completed its earn-in option to obtain majority ownership (75 per cent) of the Curipamba project. Adventus will finance capital costs to production and receive 95 per cent of the free cash flows until all of its investments since 2017 are repaid, after which the project cash flows will be shared 75 per cent to Adventus and 25 per cent to Salazar.

In December, 2021, Adventus published a feasibility study covering the open-pit mineral reserve of the El Domo-Curipamba project, outlining attractive operating metrics and robust economics:

• Proven and probable mineral reserves of 6.5 million tonnes at 1.93 per cent copper (Cu), 2.52 grams per tonne (g/t) gold (Au), 2.49 per cent zinc (Zn), 45.7 g/t silver (Ag) and 0.25 per cent lead (Pb);
• A 10-year mine life with average annual production of 10,463 tonnes per annum (tpa) copper and 21,390 tpa copper equivalent over the life-of-mine;
• Production C1 cash cost of $1.14 (U.S.)/pound (lb) and AISC of $1.26 (U.S.)/lb copper equivalent;
• Initial capital cost (including refundable VAT (value-added tax)) of $248-million (U.S.) with a payback period of 2.6 years, after-tax internal rate of return (IRR) of 32 per cent and net present value (NPV) at an 8-per-cent discount of $259-million (U.S.), utilizing $3.50 (U.S.)/lb Cu, $1,700 (U.S.)/oz Au, $1.20 (U.S.)/lb Zn, $23 (U.S.)/oz Ag and 95 U.S. cents/lb Pb.

Concurrent private placement

Concurrent with entering into the arrangement agreement, Silvercorp and Adventus entered into an investment agreement pursuant to which Silvercorp will subscribe for 67,441,217 Adventus shares at an issue price of 38 cents per share, or $25,627,662 in the aggregate. Upon completion of the placement, Silvercorp will hold approximately 15 per cent of the total issued and outstanding shares of Adventus. Proceeds from the placement will be used to: (i) repay the amounts outstanding under a credit facility with Trafigura Pte. Ltd. in the amount of approximately $9.9-million, which includes penalties payable for the early repayment under the facility; (ii) finance the settlement of the outstanding amounts payable pursuant to a convertible loan agreement between Adventus and Altius Resources Inc. in the amount of approximately $9.6-million; (iii) finance normal course activities at the El Domo project in the amount of approximately $2.7-million; and (iv) finance general working capital expenses in the amount of $3.4-million, which expenses are expected to include financing of early development expenditures to advance construction of the El Domo project, and finance general and administrative expenses between announcement and closing of the transaction.

The financing of the above-listed expenses through the placement was a critical factor in Silvercorp determining to proceed with the transaction, as the majority of the expenses must be paid prior to the closing of the transaction and Adventus does not have sufficient cash on hand to finance these costs. Silvercorp has requested the repayment of the Altius loan as, under the terms of this loan, Altius has the right to increase its royalty on the El Domo project. It is Silvercorp's view that if this royalty right was exercised, it would have a negative impact on the project economics. Silvercorp has also requested the repayment of the Trafigura facility, which matures on June 30, prior to the closing of the transaction. The remaining use of proceeds, as set out above, is being directed toward general, administrative, project maintenance and project advancement expenditures, which expenditures will allow Adventus to keep the projects in good standing and continue or commence project development activities. Silvercorp views the financing of these expenses to be essential in terms of maintaining the goodwill of the company within the local community and the various levels of government.

The completion of the placement has been conditionally approved by the TSX Venture Exchange and remains subject to final acceptance by the TSX-V on behalf of Adventus for the listing of the Adventus shares to be issued to Silvercorp. The Adventus shares to be issued to Silvercorp will be subject to a statutory four-month hold period under applicable securities laws. Completion of the placement and the repayment of indebtedness does not provide a guarantee that the transaction will be completed.

Transaction summary

Under the terms of the transaction, Silvercorp will acquire all the issued and outstanding Adventus shares (other than Adventus shares owned by Silvercorp at the effective time of the transaction), and Adventus shareholders will receive 0.1015 Silvercorp share for each existing Adventus share held. All outstanding Adventus stock options and warrants will become exercisable for Silvercorp shares, with the number of Silvercorp shares issuable on exercise, and the exercise price adjusted in accordance with the exchange ratio. All outstanding Adventus restricted share units will immediately vest upon closing of the transaction and be settled in cash, financed by Silvercorp through Adventus.

The transaction will be carried out by way of a court-approved arrangement under the Canada Business Corporations Act, and a resolution to approve the transaction will be submitted to Adventus shareholders, and holders of Adventus stock options and restricted share units at a special meeting of securityholders expected to be held on or about June 28, 2024. The transaction will require approval by: (i) 66-2/3 per cent of the votes cast by Adventus shareholders, and holders of options and restricted share units voting as a single class; and (ii) a simple majority that excludes those not entitled to vote in accordance with Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions. Each of the directors and senior officers of Adventus, Ross Beaty, and Wheaton Precious Metals Corp., representing in aggregate approximately 23 per cent of the issued and outstanding Adventus shares, have entered into voting support agreements with Silvercorp and have agreed to vote in favour of the transaction at the special meeting in accordance with those agreements. In addition, Salazar has entered into an agreement with Silvercorp whereby it has indicated it will support the transaction.

In addition to Adventus securityholder and court approval, the transaction is also subject to the satisfaction of certain other closing conditions customary for a transaction of this nature. The transaction has been conditionally approved by the TSX-V but remains subject to final approval of the TSX-V on behalf of Adventus, and approval of the TSX and NYSE American on behalf of Silvercorp, including the acceptance for listing of the Silvercorp shares to be issued in connection with the transaction. The transaction is expected to be completed in the third quarter of 2024.

The arrangement agreement includes representations, warranties, covenants, indemnities, termination rights and other provisions customary for a transaction of this nature. In particular, the arrangement agreement provides for customary deal protections, including a non-solicitation covenant on the part of Adventus and a right for Silvercorp to match any superior proposal (as defined in the arrangement agreement). The arrangement agreement includes a termination fee of $10-million, payable by Adventus, under certain circumstances (including if the arrangement agreement is terminated in connection with Adventus pursuing a superior proposal).

Boards approvals and recommendations

The board of directors of Adventus has unanimously approved the transaction and recommends that Adventus shareholders vote in favour of the transaction at the special meeting.

Cormark Securities Inc., financial adviser to Adventus, has provided an opinion to the Adventus board stating that, based upon and subject to the assumptions, limitations and qualifications set forth therein, the consideration to be received by Adventus shareholders pursuant to the transaction is fair, from a financial point of view, to Adventus shareholders. Additionally, Raymond James Ltd. has provided an independent opinion to the Adventus board stating that, based upon and subject to the assumptions, limitations and qualifications set forth therein, the consideration to be received by Adventus shareholders pursuant to the transaction is fair, from a financial point of view, to Adventus shareholders.

Further details regarding the terms of the transaction are set out in the arrangement agreement, which will be publicly filed by Adventus under its profile on SEDAR+. Additional information regarding the terms of the arrangement agreement, the background to the transaction, the rationale for the recommendations made by the Adventus board, and how Adventus shareholders can participate in and vote at the special meeting to be held to consider the transaction will be provided in the management information circular for the special meeting, which will also be filed on SEDAR+. Adventus shareholders are urged to read these and other relevant materials when they become available.

Boards approvals and recommendations

BMO Capital Markets is acting as financial adviser to Silvercorp. McCarthy Tetrault LLP and FBPH Abogados are acting as Silvercorp's Canadian and Ecuadorian legal advisers, respectively.

Cormark Securities is acting as financial adviser to Adventus. Bennett Jones LLP and AVL Abogados are acting as Adventus's Canadian and Ecuadorian legal advisers, respectively.

Conference call/webinar details

Silvercorp and Adventus will host a joint conference call to discuss the transaction on April 26, 2024, at 8 a.m. Eastern Time/5 a.m. Pacific Time. Participants are advised to dial in five minutes prior to the scheduled start time of the call. A presentation will be made available prior to the webcast. Participants may dial in using the numbers below or by accessing the webcast on-line:

• Toll-free in the United States and Canada: 1-888-664-6383;
• All other callers: 1-416-764-8650;
• Register to join the webcast on-line.

Qualified persons

Guoliang Ma, PGeo, manager of exploration and resources of Silvercorp Metals, and Christian Paramo, PGeo, senior geologist of Adventus Mining, both qualified persons under National Instrument 43-101, have approved the scientific and technical information related to the operations matters contained in this news release.

Early warning information

Silvercorp does not currently own any Adventus shares. Following completion of the placement, Silvercorp will own 67,441,217 Adventus shares, representing approximately 15 per cent of the issued and outstanding Adventus shares. The placement shares were issued to Silvercorp at an issue price of 38 cents per share, or $25,627,662 in the aggregate. Following the completion of the transaction, Silvercorp will own 100 per cent of the issued and outstanding Adventus shares. An early warning report will be filed by Silvercorp in accordance with applicable securities laws and will be available on SEDAR+ or may be obtained directly from Silvercorp upon request at 604-669-9397. Silvercorp's head office is located at suite 1750, 1066 W. Hastings St., Vancouver, B.C., Canada, V6E 3X1.

Adventus personnel update

Adventus announces that Luc Vets has been appointed as project consultant effective May 1, 2024. Mr. Vets will succeed Dustin Small, who will be leaving Adventus by April 30, to pursue other opportunities. The company wishes Mr. Small every success in his future endeavours. Mr. Vets is a seasoned engineer and project manager with over 30 years of end-to-end project execution experience in both the mining and industrial sectors throughout various continents in the world. Mr. Vets has a dual mechanical and electrical degree from University of Port Elizabeth with a master in high voltage engineering, as well as a general MBA from James Cook University.

About Silvercorp Metals Inc.

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

About Adventus Mining Corp.

Adventus Mining is an Ecuador-focused copper-gold exploration and development company. Adventus is advancing the majority-owned Curipamba copper-gold project, which has a completed feasibility study on the shallow and high-grade El Domo deposit. With the recent merger with Luminex Resources Corp., Adventus Mining owns the Condor gold project and a large exploration project portfolio that spans over 135,000 hectares -- one of the largest holdings in Ecuador. The company's strategic shareholders include Mr. Beaty's Lumina Group, Altius Minerals, Wheaton Precious Metals and significant Ecuadorian investors.

This announcement has been approved for distribution by the board of directors of each of Silvercorp and Adventus.

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