Silvercorp clears way for Perseus Mining takeover of OreCorp

A winner has emerged in the months-long battle for Africa-focused gold developer OreCorp (ASX: ORR). The Australia-based company is recommending shareholders accept the off-market takeover offer from Perseus Mining (TSX: PRU; ASX: PRU) after a competing bid by Canadian rival Silvercorp Metals (TSX: SVM; NYSE: SVM) lapsed.

Perseus and Silvercorp have vied for months to acquire OreCorp for its Nyanzaga gold project in northwest Tanzania. Last week, Perseus raised its cash offer to A57.5¢ a share. The figure, representing 4.5% increase over its previous bid of A55¢, had been originally turned down by OreCorp earlier this year.

Perseus also revealed at the time it had won the support of two big OreCorp shareholders who between them owned more than 15% and extended the offer to April 19.

OreCorp had given Silvercorp five days to increase its bid, but this period has now expired.

As no other bid has since emerged, OreCorp is now encouraging shareholders to accept Perseus’s proposal.

“The OreCorp board now unanimously recommends that OreCorp shareholders accept the amended proposal once it is capable of acceptance, in the absence of a superior proposal,” it said in a statement.

Perseus has been looking for additional gold assets in Africa to grow its portfolio. It operates three gold mines in Africa: Edikan in Ghana, and Sissingu and Yaour in Côte d’Ivoire.

Nyanzaga is located near Barrick Gold’s (TSX: ABX; NYSE: GOLD) Bulyanhulu mine and AngloGold Ashanti’s (JSE: ANG) (NYSE: AU) Geita mine.

A 2022 definitive feasibility study gave the project an after-tax net present value of $618 million at a 5% discount rate and an internal rate of return of 25%.