A subsidiary of Silvercorp Metals Inc (TSX:SVM) (NYSEAMERICAN:SVM) has been issued 30 million common shares from Avalon Investment Holdings Ltd, the holder of an indirect 100% interest in the Omai Gold Mine in Guyana.
Under the completed non-brokered private placement financing, shares were sold for US$0.15 each for gross proceeds of US$4.5 million, according to a statement Tuesday.
In connection with the financing, Anconia Resources Corp (CVE:ARA) and Silvercorp entered into an investor rights agreement pursuant to which Silvercorp, as long as it owns at least 10% of the issued and outstanding shares of Anconia, has the right to participate in equity financings in order to maintain its pro-rata interest in Anconia at the time of any such financing, and to nominate one individual to serve as a director of Anconia.
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Anconia earlier in July provided an update in connection with a proposed reverse take-over of Avalon. The proposed transaction is subject to the approval of the TSX Venture Exchange to list the shares of the Resulting Issuer, which will continue to carry on exploration and development, focused primarily on the exploration of Avalon's Omai Gold Mine project.
“We are very pleased to have received the support of Silvercorp as we continue advancing the Omai Gold Mine,” said Mario Stifano, incoming president and CEO of the Resulting Issuer.
“Omai has historically produced over 3.7 million ounces of gold and has the potential to again become a tier-one gold asset in the Americas.”
Upon closing of the transaction, it is anticipated that Silvercorp will own 15.8% of the Resulting Issuer.
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