Silvercorp will purchase shares of New Pacific to maintain a 28.8% pro rata interest pursuant to its participation right and further increase its interest by 100,000 shares, for a total of 1,320,710 shares.
Last week the company struck a deal with BMO Capital Markets (BMO), which will act as sole underwriter, and will buy over 4.2 million shares in the company on a bought deal basis at C$5.90 per share.
BMO was also granted the option for 30 days following closing, to purchase up to an additional 15% of New Pacific shares to cover any over-allotments.
The funds will be used to advance its 100%-owned Silver Sand project in Bolivia.
Following the closing of the transaction, Silvercorp will own just over 43.9 million shares or 28.9% of the company, assuming BMO does not exercise its over-allotment option.
Silvercorp is a profitable Canadian mining company producing silver, lead and zinc metals in concentrates from mines in China.
The financing is expected to close by June 9.
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