TinCoff, Ecuador Santa Barbara Gold Copper Acquisition Structure Disclosure... Supplementary Announcement Before Shareholders' Meeting

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Tincorp Metals ( Stock Code: TIN) On the eve of the upcoming regular and special shareholders’ meeting scheduled for May 5, has issued a supplementary announcement regarding the acquisition of the “Santa Barbara” gold-silver-copper project in Ecuador. This announcement serves to supplement and correct the original proposal description, with core content including the transaction background, financing structure, stakeholder participation, and changes to minority shareholder approval standards.

The company plans to acquire Santa Barbara project by purchasing 100% of Santa Barbara Metals, a wholly owned subsidiary of Silvercorp Metals (Stock Code: SVM). After disposing of the Skukum gold mine project in Yukon, Canada, in September 2025, Tincorp has been seeking large-scale gold-silver-copper assets that could alter its investment portfolio. Currently, its assets include the Porvenir polymetallic tin-zinc-silver project and the SF tin project in Bolivia.

Silvercorp divests non-core assets, Tincorp targets “Portfolio Transformation”

The announcement shows that Silvercorp acquired the Santa Barbara project in July 2024 through a deal with Adventus Mining. Although the asset is evaluated as a promising exploration-stage asset, it is not part of Silvercorp’s core operational strategy. Conversely, during 2024 and 2025, Tincorp reviewed multiple mining projects in Latin America, Eastern Europe, Africa, and Central Asia, but ultimately did not proceed with any acquisitions.

In this context, after Silvercorp announced the acquisition of two gold mines in Kyrgyzstan in January 2026, Silvercorp management proposed the Santa Barbara project in Ecuador as an alternative to Tincorp. The company believes that, based on the region’s past large-scale gold-copper resources, geological potential, and proximity to nearby large mines, this acquisition has strategic significance.

$13.5 million in cash, CAD 6 million in stock, 1.5% NSR royalty

The final transaction terms are: staged payment of $13.5 million in cash, issuance of common shares worth CAD 6 million at closing, and a 1.5% net smelter return (NSR) royalty on the project. Of this, two-thirds (i.e., 1.0%) can be repurchased by Tincorp for CAD 10 million.

At an exchange rate of $1 = 1,477.50 KRW, the cash consideration is approximately 199.4625 billion KRW. The company states that by blending cash, stock, and royalties in the transaction structure, it reduces initial financial burden while maintaining upside potential from future exploration results.

Tincorp’s board considers that, during the transaction evaluation process, there was no need to hire external financial advisors or independent valuation agencies. They reasoned that, based on Canadian TSX Venture Exchange regulations, publicly available technical data, and similar transaction cases, judgments could be made, also considering the company’s cash position at the time. After reviewing multiple criteria—including the relative valuation compared to historical resource estimates—the board concluded that the terms are fair and in the best interest of the company.

Conflict of interest management also emphasized… Silvercorp CEO abstains from voting

Given the related-party transaction procedures, disclosures have been made. Silvercorp CEO and Tincorp director Louis Peng did not participate in discussions or decisions and abstained from voting in the board resolution on February 24. The company states that, although no special committee was established, independent directors engaged in multiple informal negotiations from February 2 to 24, reviewing the transaction and concurrent private placement.

The company reports no opposition was received, and independent directors strongly support the transaction and financing plan. Negotiations were conducted independently by Silvercorp President Ron Shewchuk and Tincorp’s interim CEO Victor Peng through advisors.

Up to CAD 17.5 million in financing… 23.8% involvement by insiders

Tincorp is also implementing a private placement of up to approximately CAD 17.5 million. The structure involves issuing CAD 10 million via intermediary and CAD 6 million via non-intermediary subscription receipts, with the intermediary portion potentially increasing by up to 15%. The offering price is set at approximately a 7% discount to the volume-weighted average price (VWAP) over the 10 trading days prior to February 20, 2026.

The company states that funds raised will be used for paying the cash consideration at closing, initial exploration of the Santa Barbara project, general administrative expenses, Ecuador operations, and transaction costs. Fees are set at 6% of the total amount raised in cash, plus warrants of equivalent value as compensation.

Insider participation is also significant. Louis Peng subscribed for 5 million shares, Victor Peng for 2 million, Alex Zhang for 750k, Lorne Waldman for 75k, Jonathan Hoyle for 500k. Including management and staff from Silvercorp, related parties’ total subscriptions amount to 750k shares, about 23.8% of the total 43.75 million shares issued.

Post-transaction, Silvercorp’s ownership could reach 36.7%

Based on estimates, if the maximum number of shares available to the seller is issued and the option to receive common shares for CAD 5.5 million exercised three years after closing, Silvercorp would directly or indirectly hold 54,587,199 shares. This represents approximately 36.7% of the 148,800,368 shares outstanding after the transaction and concurrent private placement.

This indicates that the acquisition could substantially alter Tincorp’s asset composition and potentially impact its governance structure. However, the company adds that completion is subject to shareholder approval and regulatory clearances.

Correction of minority shareholder exclusion shares… and correction of proposal number

The announcement also includes corrections. Tincorp states that Silvercorp director Yikang Liu’s holding of 12,680 common shares was omitted from the original proposal description. Accordingly, the number of shares to be excluded from minority shareholder approval increases from 30,814,651 to 30,998,212. The proportion of total issued shares is revised from 43.28% to 43.53%.

Additionally, the number of subscription receipts recorded in the financing resolution was corrected from 28.75 million to the actual issuance of 43.75 million shares. The company states that the correct figures are reflected in proxies and voting instructions sent to shareholders.

From Bolivia-focused exploration to Ecuador gold-silver-copper story

Tincorp summarizes the significance of this transaction as a “portfolio restructuring.” The company states that the Santa Barbara project is located in a promising mineral rights area in Ecuador, near Lundin Gold’s Fruta del Norte, Solaris Resources’ Warintza, and Silvercor

TP AI Notes This article is summarized based on TokenPost.ai language model. Main content may be omitted or inconsistent with facts.