Silvercorp Metals, a Canadian mining company, is set to acquire a 70% interest in the Tulkubash and Kyzyltash gold projects in Kyrgyzstan for $162m (C$224.09m).
The company has signed a share purchase agreement (SPA) with Chaarat Gold and a cooperation agreement with the National Investment Agency of Kyrgyzstan.
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Silvercorp will gain control over Chaarat ZAAV CJSC, which holds mining and exploration licences in the Tian Shan region and will convert it into a joint venture (JV) with Kyrgyzaltyn, a subsidiary of the Kyrgyz Republic.
Silvercorp will manage this venture, holding a 70% stake, while Kyrgyzaltyn retains a 30% free-carried interest.
As per the terms of the cooperation agreement, Silvercorp will make staged payments totalling $70m to the National Investment Agency, contingent on government approvals and extending the mining licence to 2062.
The development plan consists of two phases. The first involves constructing a four million tonnes per annum open-pit mine at Tulkubash, which is expected to start production between 2027 and 2028.
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By GlobalDataThis phase aims for an annual output of approximately 110,000oz of gold over three to four years with an investment of $150m.
If the Karator exploration licence is converted into a mining licence in 2026, operations could be extended by at least two years.
Phase two targets the Kyzyltash sulphide deposit development from 2028 to 2031, and involves around $400m.
This phase includes both open-pit and underground mining operations using flotation and bacterial oxidisation techniques.
Production is expected to begin by 2031, yielding 190,000–230,000oz of gold annually for more than 18 years.
Silvercorp chair and CEO Rui Feng said: “With our 20 years of mining expertise and financial strength, we are confident Silvercorp and Chaarat’s well-established local team can work with our Kyrgyz partner to advance ahead on the projects and unlock value for all stakeholders and shareholders.”
Located approximately 490km south-west of Bishkek, the Tulkubash/Kyzyltash gold projects have undergone extensive exploration since the Soviet era.
The Tulkubash project has a measured and indicated resource of 856,000oz of gold at a grade of 1.36 grams per tonne (g/t), alongside an inferred resource of 100,000oz at 1.37g/t, based on a cut-off grade of 0.5g/t.
In contrast, the Kyzyltash project holds a measured and indicated resource of 6.02 million ounces (moz) of gold at a grade of 2.57g/t, along with 18.7moz of silver at 8g/t.
Additionally, it has an inferred resource of 1.19moz of gold at 2.47g/t and 3.22moz of silver at 6.7g/t, calculated with a cut-off grade of 1g/t.
Silvercorp plans to fund this acquisition using existing cash reserves and short-term investments. Further project advancements will be supported by operational cash flows and available financing capacity.
In December 2024, Silvercorp announced plans to develop the Condor gold project in southern Ecuador as an underground operation concentrating on high-grade gold structures and rhyolitic dykes.
