Conditional approval has been given to New Pacific for acquisition of the RZY silver-lead-zinc project in Qinghai province. The acquisition will involve the company acquiring a majority interest in Silvercorp Metals’ wholly-owned subsidiary Fortress Mining for a payment of US$3.5 million.
A second option to acquire the remaining 20% within two years for an additional US$5 million has also been agreed upon.
The TSX has approved the agreement subject to certain conditions including receiving the approval of the company’s disinterested shareholders because the payment will be greater than 10% of the current market values of New Pacific’s listed common shares. A meeting with shareholders is scheduled for November.
The RZY project is an early stage silver-lead-zinc exploration project on a high plateau with an average elevation of 5000 metres above sea level. The project is about 237km via paved and gravel roads from the capital of Yushu Tibetan Autonomous Prefecture.
Known mineralization is silver-lead-zinc veins with two silver-lead-zinc mineralized zones, MI-1 and MI-2, boasting a strike extent of 6.5km and width of 25 to 100 metres.
These zones have been identified by historical surface work including trenching, pitting, geology mapping and geophysics surveying. The soil geochemical anomaly has also indicated there could be another mineralized zone to the north in a flat area about 1km from the mountains.
In 2006, Silvercorp paid consultants to complete a NI 43-101 report on the project which indicated that silver-lead-zinc mineralization exists at RZY.
New Pacific is a Canadian gold and silver exploration and development company which owns the Tagish Lake gold project in Yukon, Canada.