Silvercorp Mining Purchases Majority Equity in Two China Mining Companies

Silvercorp just announced that its 77.5% owned subsidiary, Henan Found Mining Co. (“Henan Found”), signed a share purchase agreement to acquire a 90% equity interest in Zhongxing Mining Co. Ltd. (“Zhongxing”) and Chuanxin Mining Co. Ltd. (“Chuanxin”), two local private mining companies, with common owners, in Luoyang City, Henan Province.

We have already written about China starting to get involved more passionately with the financial sector of the world. They have also made the jump to being more involved in precious metals. It seems even big mining companies are heading to China to dig around some.

Henan Found’s total cash payment for the acquisition of both companies is approximately US $10.4 million, including US$4.3 million for the equity interest and US $6.1 million cash payment for outstanding debt. Henan Found has made 80% of the required total payment and has taken over control.

Zhongxing’s main assets include the high grade XBG silver-gold-lead-zinc (“Ag-Au-Pb-Zn”) mine with a mining permit covering 26.36 square kilometers (km2) expiring November 2022 and the adjacent NTM gold exploration permit covering 2.54 km2. Chuanxin’s main assets include a 350 tonne-per-day (“t/d”) floatation mill and an associated tailings management facility built in 2009 within the mining permit area, and an environmental permit to construct a 1,000 t/d floatation mill.

With the economy the way it is you can expect to hear more and more news regarding mining companies digging around in other countries for precious metals, especially silver. The purchase price the Henan paid was actually relatively low, and while they will make their money back with ease, it looks like they are shooting for a huge score and looking to find something unexpected in the next few years.

Silver continues to be the most popular precious metal and will continue to be because of the high demand that investors and industries have for it.

Cautionary Statements

The majority of this article was taken from a Press Release.

Blog Silver has not reviewed and does not accept responsibility for the adequacy or accuracy of the content of this Press Release.

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