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Silvercorp Metals Inc. With President Lon Shaver On Strategic Offer For OreCorp

The interview, conducted by Coreena Robertson on The Watchlist, featured Lon Shaver, President of Silvercorp Metals, discussing the differences between Silvercorp's offer for OreCorp and Perseus's hostile bid. Watch it here. 

Shaver highlighted the unanimous recommendation from OreCorp's board for Silvercorp's offer, which includes a blend of cash and shares, providing ongoing upside potential for OreCorp shareholders.

He emphasized the importance of this structure in allowing shareholders to participate in the project's development, contrasting it with the potential loss of future benefits in an all-cash transaction.

First off, our offer is unanimously recommended by the OreCorp board of directors, so that's a key factor in this situation. The other difference is in the form of consideration that's being offered.

We're offering 19 cents Australian in cash, which is about a third of the value based on where things are currently trading. The other two-thirds, though, are in the form of a share component in our company. In the mining industry, many acquisitions are done with share consideration. In fact, this is often more commonplace than all-cash transactions, and one reason for this is to give target shareholders the opportunity to have continuing upside in their project.

In our case, OreCorp shareholders will own approximately 18% of Silvercorp after closing, which gives them substantial continuing upside in their Nyanzaga project as it's developed. And this is really the reason they own OreCorp in the first place. So, in this down market for mining stocks, an all-cash transaction means the future benefits of the project go to the buyer.

Shaver also expressed optimism about the value of Silvercorp shares and the positive response from OreCorp shareholders, suggesting a potential market reevaluation in Silvercorp's favor as the project advances.

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