Silvercorp Metals Inc. (SVM) shares surged on Tuesday after announcing a major Central Asian gold acquisition that signals the company's strategic pivot toward precious metals expansion.
The Canadian miner has inked deals to acquire a 70% stake in the Tulkubash/Kyzyltash gold projects in the Kyrgyz Republic for roughly $162 million. It's a significant bet on undeveloped gold deposits in a region known for its mineral wealth but also its geopolitical complexity.
The transaction involves two key agreements: a share purchase deal with Chaarat Gold Holdings and a cooperation framework with the National Investment Agency under the President of the Kyrgyz Republic. The package includes a fully permitted mining license plus nearby exploration areas covering about 34 square kilometers.
How The Deal Is Structured
Silvercorp will partner with Kyrgyzaltyn, a subsidiary of the Kyrgyz government, in a joint venture arrangement. Silvercorp gets the 70% operating interest while Kyrgyzaltyn receives a 30% free-carried stake once the deal closes.
The $162 million purchase price breaks down into two payments. The National Investment Agency receives $70 million in staged installments tied to regulatory approvals and license extensions. Chaarat Gold Holdings gets $92 million after the government waives its pre-emptive purchase rights.
Silvercorp has the financial firepower to make it happen. The company reported cash, cash equivalents, and short-term investments of $382.3 million as of September 30, 2025, up $5.1 million from the prior quarter. Its equity investments added another $180.2 million in market value at quarter-end.
Building It Out In Two Phases
The development plan unfolds in stages, starting with the Tulkubash open-pit and heap leach operation. Silvercorp plans to invest approximately $150 million to construct a facility capable of processing around 4 million tonnes of ore each year.
If everything goes according to schedule, production should kick off between 2027 and 2028, with annual gold output targeted near 110,000 ounces. That's a solid foundation, but the real upside comes later.
Phase 2 focuses on the Kyzyltash sulfide deposit and requires substantially more capital—roughly $400 million in additional investment. This stage involves developing both open-pit and underground mining operations, plus flotation, BIOX, and CIL processing facilities. Once operational around 2031, this phase could generate approximately 190,000 to 230,000 ounces of gold annually for more than 18 years.
Why This Matters
"We are pleased to develop these Projects, the largest undeveloped gold deposits in the West Tien Shan gold belt," said Dr. Rui Feng, Silvercorp's chair and CEO. He noted that the company's mining experience and local partnerships should help advance the projects and unlock shareholder value.
The acquisition aligns with Silvercorp's broader strategic goals: diversifying its asset portfolio, entering a third jurisdiction beyond its existing operations, and capitalizing on favorable gold market fundamentals. The company intends to fund early-stage development using existing cash, short-term investments, and operating cash flow.
The Tulkubash/Kyzyltash projects are located about 490 kilometers southwest of Bishkek, the capital. Chaarat reportedly invested over $174 million in exploration and infrastructure work at the sites since 2002, providing Silvercorp with a head start on development.
Silvercorp Metals shares jumped 8.40% to $12.26 at the time of publication on Tuesday, hitting a new 52-week high.
