Adventus Mining (TSXV: ADZN) is set to proceed with being acquired by Silvercorp Metals (TSX: SVM), despite prior concerns of a material adverse effect previously being raised by Silvercorp.
The companies today confirmed that the issue of whether a material adverse event had occurred has been resolved, with the two entities to proceed with closing the transaction later today.
The issue of whether an adverse effect had occurred surrounded a constitutional protective action that was filed against Ecuador’s Ministry of Environment, Water and Ecological Transition and the office of the Attorney General of Ecuador on June 5. The action challenged that an environmental licensed issue for Adventus’ El Domo-Curipamba project was invalid due to procedural allegations related to the sufficiency of a consultation process conducted by the Ministry for the license.
READ: Silvercorp Metals to Acquire Adventus Mining For $200 Million
However, a court decision following a hearing on July 24 rejected the protective action, concluding that the process conducted for the environmental permit was sufficient. The parties that filed the protective action have indicated they intend to appeal the decision, however no date has yet been set for that appeal.
As a result of the court case, Silvercorp defined the event as a material adverse effect, which was required to be resolved prior to the closing of the arrangement. However, Adventus contested that the action was not a material adverse event, and previously indicated that it would take any necessary steps to ensure the closing of the transaction, including making claims in the Ontario Superior Court of Justice for specific performance under the original arrangement agreement between the two parties.
The parties are now said to have resolved the case, with both Adventus and Silvercorp now saying that they are “taking all necessary steps to close the plan of arrangement transaction on July 31, 2024.”
Silvercorp separately this morning stated that with the local court ruling in favour of Adventus, it was no longer concerned about the action.
Adventus Mining last traded at $0.52 on the TSX Venture.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
