According to the terms of the transactions, Silvercorp is acquiring 70% of the shares of Chaarat ZAAV, which holds a mining license for an area of approximately 7 square kilometers. This includes fully licensed gold mining projects "Tulkubash" and "Kyzylbash," as well as exploration licenses covering 27.42 square kilometers, encompassing the gold zones of Karator and Ishakuldy, located in the Tian Shan mountains. The expected amount of the deal is $162 million.
Additionally, through its subsidiaries, the company has entered into an agreement with OJSC "Kyrgyzaltyn" for the purchase of shares and a shareholder agreement. This agreement stipulates that after the completion of the transaction, Chaarat ZAAV will become a joint venture between Silvercorp and "Kyrgyzaltyn." Silvercorp will receive a 70% stake and will act as the operator, while "Kyrgyzaltyn" will hold the remaining 30% without any financing obligations.
As part of the collaboration, the National Investment Agency of the Kyrgyz Republic will receive $70 million in two installments:
The first payment of $60 million will be made after the Kyrgyz government renounces its legal rights to the projects and extends the mining license for the joint venture until June 25, 2062;
The second payment of $10 million will be made after certain project milestones are achieved.
According to the share purchase agreement, Chaarat will receive $92 million from Silvercorp, provided that the Kyrgyz government waives its preemptive rights to the projects.
The joint venture, according to the cooperation agreement and shareholder agreement, plans to implement a two-phase development program for the "Tulkubash" and "Kyzylbash" projects.
Phase One - Development of the Tulkubash Deposit (2026–2028)
Silvercorp plans to invest $150 million in the construction of an open-pit mine and the installation of a heap leaching system with a capacity of 4 million tons of ore per year to process oxidized gold ores.
It is expected that from 2027–2028, production will reach approximately 110,000 ounces of gold per year for 3–4 years. If the Karator exploration license is converted into a mining license in 2026, the lifespan of the open-pit mine could be extended by at least two years.
Phase Two - Development of the Kyzylbash Deposit (2028–2031)
Investments of approximately $400 million will be directed towards the development of the Kyzylbash sulfide deposit, including the creation of an open-pit mine and underground mine with a capacity of 3–4 million tons of ore per year, as well as processing facilities using flotation, bacterial oxidation (BIOX), and cyanidation (CIL). After reaching industrial production starting in 2031, it is expected to produce 190,000–230,000 ounces of gold per year for over 18 years.
“We are excited to develop these projects, which represent the largest undeveloped gold deposits in the Western Tian Shan. All stakeholders agree on the plan to bring the projects to the stage of industrial production. With 20 years of experience and a solid financial foundation, we are confident that Silvercorp, together with the experienced local team at Chaarat, can effectively collaborate with our Kyrgyz partner to unlock the value of the projects,” said Rui Feng, Chairman and CEO of Silvercorp.
The company emphasized that the inclusion of the Tulkubash and Kyzylbash projects in Silvercorp's portfolio aligns with its strategy of diversification and asset expansion, as well as taking advantage of favorable market conditions for gold.
