Celsius Resources Ltd (ASX:CLA, AIM:CLA) said it has entered into a non-binding term sheet and a binding subscription agreement which would see Canadian miner Silvercorp Metals Inc (TSX:SVM, AMEX:SVM) acquire all outstanding shares of Celsius at a fixed price of A$0.03 per share.
The consideration represents a 76% premium to the 20-day volume-weighted average price of Celsius shares on the ASX. The total value of the acquisition is estimated to be around A$56mln.
As part of the deal, Celsius shareholders are expected to receive shares in a new exploration company, called SpinCo, through an in-specie distribution. SpinCo will hold all of Celsius' rights and interests in the Sagay project in the Philippines and the Opuwo Cobalt project in Namibia.
The distribution is anticipated to be on a 10 Celsius shares for 1 SpinCo share basis, with Celsius shareholders holding approximately 87% of SpinCo.
Silvercorp has agreed to invest A$4 million in SpinCo, with a post-financed market capitalization of A$30 million. Additionally, Celsius and Silvercorp have executed a binding subscription agreement for A$5 million, which will primarily be used for interim funding of Celsius' Maalinao-Caigutan-Biyog Copper-Gold Project in the Philippines.
In a statement commenting on the proposed takeover, Julito Sarmiento, executive chairman of Celsius Resources said: "This is a positive step and timely development for Celsius and its subsidiaries. We are happy to have received an offer from Silvercorp which shares Celsius' corporate values and our vision to develop mining projects in a sustainable, inclusive, and responsible manner."
Sarmiento also highlighted the potential of the deal for the development of Celsius' mineral assets, particularly the MCB Copper-Gold Project with the Balatoc Indigenous Community in Kalinga, Philippines. He emphasized the endorsement of the Philippines' minerals industry and the commitment to environmental protection and shared prosperity for all stakeholders.
Silvercorp Metals has been engaged in profitable mining operations in China for 17 years. The company focuses on the sustainable production of precious and nonferrous metals and has a market capitalization of US$607mln.