Tanzania backs SilverCorp takeover of ASX-listed gold developer OreCorp

Silvercorp Metals’ (TSX: SVM; NYSE: SVM) planned takeover of African gold developer OreCorp (ASX: ORR) has been cleared by the Tanzanian Fair Competition Commission (FCC).

The decision paves the way for the Canadian miner to complete the acquisition of OreCorp and its flagship asset — the Nyanzaga gold project in Tanzania.

Silvercorp was momentarily chosen in January a competing bid by Perseus Mining (TSX: PRU; ASX: PRU), which produced 535,000 oz. of gold last year from three mines in West Africa: Yaouré and Sissingué in Côte d’Ivoire, and Edikan in Ghana. It’s preparing to develop the Meyas Sand gold project in Sudan. 

Perseus Mining noted since that it was preparing to pursue its plan to buy OreCorp with an off-market takeover bid.

Nyanzaga would cost US$474 million ($638.9 million) to build and produce 242,000 oz. of gold per year over its first decade, according to a definitive feasibility study issued in August 2022.

The project, which could reach annual output of 295,000 gold oz., is about 30 km northeast of Barrick Gold’s (TSX: ABX; NYSE: GOLD) Bulyanhulu mine. It is also 60 km east of AngloGold Ashanti‘s (NYSE: AU) Geita gold mine. 

Nyanzaga has an after-tax net present value of $618 million (at 5% discount rate) and an internal rate of return of 25% based on a $1,750 per oz. gold price, according to the feasibility study. 

The government of Tanzania holds a 16% non-dilutable free carried interest in the project.

— This article has been corrected to note that Silvercorp’s bid was not the winning bid and that Perseus intended to make an off-market offer. We regret the error.