Silvercorp lodges $76M winning bid for Chinese silver project

Silvercorp Metals Inc. unit Henan Found Mining Co. Ltd. lodged a winning bid of $76 million to acquire the exploration rights to the Zhonghe silver project from the Henan provincial government in China.

After signing a contract with the Henan government, the company will make the first payment of about $15.2 million, or 20% of the purchase price, once the project area is cleared by the authorities as a nonmilitary area.

The remaining 80% is due once the exploration right is converted into a mining license, to be paid annually over the duration of the license. Silvercorp intends to grant the local government and community an 8% to 10% project stake.

The online auction held Dec. 17 had a reserve price of 485 million Chinese yuan. Silvercorp said Jan. 21 that it plans to kick off drilling in the first quarter, with completion targeted in 2022.

As of Jan. 20, $1 was equivalent to 6.47 Chinese yuan.