VANCOUVER, BC - Silvercorp Metals Inc . (TSX: NYSE:SVM) (NYSE American: SVM), a Canadian mining company, today announced the commencement of a private placement offering of convertible senior notes valued at US$130 million, with the potential to increase by US$20 million if the initial purchasers exercise their option within 20 days post-closing.
The notes, due December 15, 2029, will be senior unsecured obligations, accruing interest payable semi-annually. They can be converted into cash, common shares, or a combination thereof under certain conditions. The company has restricted the notes' redemption before December 20, 2027, except under specific tax law changes. After this date and before the 51st scheduled trading day before maturity, the notes can be redeemed if the company's share price exceeds 130% of the conversion price for a specified period.
The interest rate, conversion rate, and other terms will be set at the time of the offering's pricing. The offering is subject to standard closing conditions, and Silvercorp plans to allocate the proceeds to construct copper-gold mining projects outside China, further exploration and development, and working capital needs.
The notes are being offered privately and will not be registered under the U.S. Securities Act of 1933, as amended, or any state securities laws, indicating they will not be available for sale in the United States except under specific exemptions.
Silvercorp, known for producing silver, lead, zinc, and gold in China, is also developing the Curipamba copper-gold project and exploring the Condor project in Ecuador. The company has not disclosed the financial terms of the notes and has cautioned that this press release should not be considered an offer to sell or a solicitation of an offer to buy any securities.
This news article is based on a press release statement from Silvercorp Metals Inc.
In other recent news, Silvercorp Metals has secured an extended SGX mine permit until 2035, enabling an increased annual production capacity of 500,000 tonnes. Additionally, the company launched a new share buyback program, planning to repurchase up to 8,670,700 of its common shares, approximately 4% of its issued and outstanding shares. In other developments, Roth/MKM maintained its Buy rating on Silvercorp Metals and increased the stock's price target from $5.10 to $6.00, reflecting updated expectations for gold and silver prices in the coming years. The company is also set to finalize its acquisition of Adventus Mining Corporation, following a favorable court ruling in Ecuador concerning environmental litigation over Adventus's Curipamba-El Domo (NASDAQ:DOMO) project. These recent developments highlight Silvercorp Metals' ongoing business activities and strategic initiatives.
InvestingPro Insights
Silvercorp Metals Inc.'s decision to raise capital through convertible senior notes comes at a time when the company is showing strong financial health and growth potential. According to InvestingPro data, Silvercorp has a market capitalization of $881.93 million and has demonstrated impressive revenue growth of 16.71% over the last twelve months as of Q1 2025. This growth trajectory aligns with the company's plans to expand its operations and invest in new mining projects.
InvestingPro Tips highlight that Silvercorp "holds more cash than debt on its balance sheet" and that "cash flows can sufficiently cover interest payments." These factors suggest that the company is well-positioned to take on additional debt through the convertible notes offering without overextending itself financially. The company's strong cash position also provides a buffer for the planned investments in copper-gold mining projects and exploration activities.
Furthermore, Silvercorp's profitability metrics are encouraging. With a P/E ratio of 13.37 and an adjusted P/E ratio of 17.31 for the last twelve months as of Q2 2025, the company appears to be trading at reasonable valuations considering its growth prospects. An InvestingPro Tip notes that Silvercorp is "trading at a low P/E ratio relative to near-term earnings growth," which could be attractive to potential investors in the convertible notes.
For readers interested in a more comprehensive analysis, InvestingPro offers 10 additional tips for Silvercorp Metals, providing deeper insights into the company's financial health and market position.
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