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- Tanzanian regulators have approved a buyout of ASX-listed OreCorp (ASX:ORR) by NYSE-listed Silvercorp
- Silvercorp’s also listed in Toronto
- OreCorp runs a gold project in Tanzania but the share price has stalled in recent history
- Tanzania, located in East Africa, forms part of ECOWAS and maintains a good relationship with the US government
- A number of Australian companies are active in Tanzania
- Shares last traded at 44.5 cents
ASX-listed OreCorp (ASX:ORR) is greenlit to be acquired by NYSE-listed Silvercorp.
OreCorp, which owns a gold project in Tanzania, has fallen onto the latter’s radar.
The buyout approval has come from the Tanzanian competition regulator on Tuesday.
Government rapport
Management pointed toward its good relationship with the Tanzanian Fair Competition Commission (FCC) as evidence of a government-wide affability.
“The FCC approval … demonstrates the constructive working relationship with all levels of Government,” OreCorp CEO Henk Diederichs said.
“We are very pleased that the FCC has provided the necessary approval to Silvercorp.”
Strong balance
In its latest quarterly, the company reported $23.56 million in cash as of September 30.
As part of the acquisition, SIlvercorp has agreed to provide OreCorp with $28 million in funding via a placement.
Funds will be used to develop the Nyanzaga gold project.
Silvercorp vision
For its part, Silvercorp sees OreCorp as a path to a “diversified, highly profitable precious metals company with a pro forma market cap of US$630 million”.
The company also pointed to robust growth pipeline opportunities.
Tanzania maintains a positive relationship with the US government as of Q4 CY23.
OreCorp shareholders are to receive a scheme booklet from Silvercorp in the coming days and weeks.
Mixed results
OreCorp’s share price has struggled through the latter COVID era.
For now, one-year returns are up 34.85 per cent.
Four brokers rate OreCorp a buy; two brokers rate it a hold.
Not the whole story
While OreCorp shares opened at 44.5 cents today, in November of 2021, shares were worth 70 cents.
In fact, they hit a high of 94 cents back in June of 2021.
The company now has a market cap of $208.8 million.
In April of 2022, OreCorp listed its subsidiary Solstice Minerals (ASX:SLS) on the ASX.
In mid-2021, the company solicited Canaccord and Euroz for $56 million in development funds.
The company’s shares suffer from subdued liquidity and relatively little household name recognition.
OreCorp shares last traded at 44.5 cents.
