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Silvercorp Metals Inc
Symbol SVM
Shares Issued 173,816,834
Close 2020-05-19 C$ 5.90
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Silvercorp increases bid for Guyana shares

2020-05-19 07:14 ET - News Release

Also News Release (C-GUY) Guyana Goldfields Inc

Mr. Lon Shaver of Silvercorp reports

SILVERCORP METALS AND GUYANA GOLDFIELDS ENTER INTO AMENDING AGREEMENT

Silvercorp Metals Inc. and Guyana Goldfields Inc. have entered into an amending agreement to the arrangement agreement entered into previously and announced on April 27, 2020, pursuant to which Silvercorp agreed to acquire all of the issued and outstanding shares of Guyana Goldfields by way of a court-approved plan of arrangement under the Canada Business Corporations Act.

Pursuant to the terms of the amending agreement, each holder of Guyana Goldfields shares will receive, for each Guyana Goldfields share held, 25 cents in cash and 0.1849 of a Silvercorp common share, for total consideration of $1.30 per share (based on the volume-weighted average price for Silvercorp common shares for the five trading days ended May 14, 2020).

The terms of the amending agreement were agreed following receipt by Guyana Goldfields of an unsolicited all-cash proposal from a third party to acquire Guyana Goldfields.

As of the date of this news release, Silvercorp holds 16,549,000 Guyana Goldfields shares, representing 9.48 per cent of the issued and outstanding common shares.

After accounting for Silvercorp's existing shares, the cash consideration of 25 cents implies a total cash component of $39.5-million, and the share consideration of $1.05 implies a total share component of 29.2 million shares. Based on these metrics, this would translate into existing Guyana Goldfields shareholders owning 14.4 per cent of Silvercorp's pro forma basic shares outstanding following the transaction.

Board of directors' recommendations

The amending agreement has been unanimously approved by the board of directors of Guyana Goldfields which recommend that Guyana Goldfields shareholders vote in favour of the transaction. The amending agreement has also been unanimously approved by the board of directors of Silvercorp.

Transaction conditions and timing

Full details of the transaction will be included in the management information circular of Guyana Goldfields that is expected to be mailed to Guyana Goldfields' shareholders in early June, 2020. The transaction will be subject to the approval of 66-2/3rds per cent of votes cast by shareholders of Guyana Goldfields at an annual and special meeting of Guyana Goldfields shareholders scheduled for June 29, 2020.

Commensurate with the increase in consideration, valuing Guyana Goldfields at approximately $227-million, the amending agreement provides for an increase in the termination fee to $9.0-million, which is to be paid by Guyana Goldfields to Silvercorp if the arrangement agreement is terminated in certain specified circumstances. Other than as described herein, the terms of the transaction remain unamended, including the terms of the interim loan facility.

Shareholders who have questions regarding the transaction should contact Guyana Goldfields' strategic shareholder adviser and proxy solicitation agent Kingsdale Advisors at 1-800-775-1986, or collect call outside North America at 416-867-2272, or by e-mail at contactus@kingsdaleadvisors.com.

About Silvercorp Metals Inc.

Silvercorp is a profitable Canadian mining company producing silver, lead and zinc metals in concentrates from mines in China. The company's goal is to continuously create healthy returns to shareholders through efficient management, organic growth and the acquisition of profitable projects. Silvercorp balances profitability, social and environmental relationships, employees' well-being, and sustainable development.

About Guyana Goldfields Inc.

Guyana Goldfields is a Canadian-based gold producer primarily focused on the exploration, development and operation of gold deposits in Guyana, South America.

We seek Safe Harbor.

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