Silvercorp Metals will not match 'superior proposal' for producer Guyana Goldfields

Silvercorp Metals Inc (NSYEAMERICAN:SVM) (TSE:SVM) revealed it will not exercise its right to match an offer for miner Guyana Goldfields Inc (TSE:GUY), which runs the Aurora gold mine, after the latter received “a superior” proposal from a third party.

As reported in May, Silvercorp amended a previously announced agreement with Guyana Goldfields Inc (TSE:GUY), which valued Guyana at around C$227 million.

READ: Silvercorp Metals launches drill program targeting previously unexploited gold at its China mines

But last week, Guyana revealed an offer from a foreign-based multinational that was 35% higher than Silvercorp’s offer.

In a statement on June 3, Guyana said its shareholders would receive cash consideration of C$1.85 for each share valuing the firm at around C$323 million.

Guyana said its board had “unanimously determined, after consultation with its financial and legal advisors” that the new offer constituted a “superior proposal” than the Silvercorp Metals agreement from April 26, which was later amended on  May 16.

It said the new offeror had also agreed to provide it with a US$30 million secured loan facility to finance ongoing operations of the Aurora gold mine and to fund other liquidity needs.

In a brief statement after market close on Wednesday, Silvercorp said that if Guyana Goldfields terminated the arrangement agreement, the China-focused miner will receive a termination fee of C$9 million.

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Story by ProactiveInvestors