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 trumped 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. 

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.