Silvercorp Goes for Gold in Kyrgyzstan with Major Project Acquisition

VANCOUVER, BC – January 27, 2026 – Canadian miner Silvercorp Metals Inc. has finalized its strategic entry into Central Asia, completing the acquisition of the substantial Tulkubash and Kyzyltash gold projects in Kyrgyzstan. The deal, sealed with a $92 million payment to Chaarat Gold Holdings Limited, marks a significant pivot for the company, diversifying its geographic and commodity focus into one of the world's most prospective, yet complex, mining jurisdictions.

The move signals the culmination of a multi-stage agreement that saw the Kyrgyz government waive its statutory pre-emptive right, clearing the path for Silvercorp to take control of Chaarat ZAAV CJSC, the entity holding the mining licenses. This acquisition is not just a simple asset purchase but the beginning of a deep-rooted partnership with the Kyrgyz Republic itself.

A Strategic Pivot to Gold and a New Frontier

For years, Silvercorp has been known primarily for its profitable silver, lead, and zinc operations in China. This acquisition represents a bold and decisive step to reshape its portfolio, adding a world-class gold asset that promises to significantly alter the company's production profile and long-term growth trajectory. The sheer scale of the resource is central to the deal's appeal.

Combined, the Tulkubash and Kyzyltash projects boast a formidable resource base. According to technical reports prepared under Canadian NI 43-101 standards, the projects hold a total measured and indicated resource of approximately 6.0 million ounces of gold and 18.7 million ounces of silver. This immediately adds a massive, long-life gold asset to Silvercorp's portfolio, positioning it as a more diversified and significant player in the precious metals space.

This move aligns perfectly with Silvercorp's stated corporate strategy, which emphasizes growth through strategic mergers and acquisitions that can generate free cash flow from long-life mines. By deploying its strong balance sheet and history of operational profitability, the company is betting it can unlock the immense value contained within the Tian Shan mountains of Kyrgyzstan. The market has responded with cautious optimism, buoyed by the company's recent successful capital raises and strong financial health, though the challenges of operating in a new region are not lost on investors.

Navigating Kyrgyzstan's Complex Landscape

The decision to invest heavily in Kyrgyzstan is a calculated one, requiring a sophisticated approach to navigating the country's political and regulatory environment. The nation's economy is heavily reliant on mining, which accounts for over half of its exports, but it also has a history of political instability and a growing trend toward resource nationalism.

Silvercorp's primary strategy for mitigating this risk lies in the structure of the deal itself. The company will convert the acquired entity, ZAAV, into a Joint Venture Company (JVC) with Kyrgyzaltyn, the state-owned enterprise that oversees the country's mineral wealth. Under the agreement, Silvercorp will act as the operator and hold a 70% interest, while Kyrgyzaltyn will retain a 30% free-carried interest.

This "free-carried" stake is crucial; it means the Kyrgyz state benefits directly from the project's success without having to contribute to the substantial development capital required. This model is designed to align the interests of the foreign operator with those of the host government, creating a partnership rather than a purely transactional relationship. Such structures are increasingly seen as a necessary framework for securing long-term stability and a social license to operate in resource-rich developing nations. The government's initial cooperation, demonstrated by the waiver of its pre-emptive purchase right, is a positive first step in what will be a long-term collaboration.

A Phased Approach to Unlocking Value

Silvercorp plans to de-risk the massive undertaking through a carefully staged, two-phase development plan. This approach allows for initial production and cash flow from a less complex deposit before committing to the larger, more capital-intensive portion of the project.

Phase 1 will focus on the Tulkubash project's oxidized gold ore. With a planned investment of approximately $150 million, Silvercorp aims to construct a 4 million-tonne-per-year open-pit mine and heap leach operation. This initial phase is projected to produce around 110,000 ounces of gold annually starting in 2028, providing an early revenue stream to support further development.

Phase 2 will tackle the much larger Kyzyltash sulfide deposit. This more complex undertaking will require an estimated $400 million investment to develop a large-scale open-pit and underground mine, complete with advanced processing facilities. Once operational, projected for 2031, this phase is expected to produce between 190,000 and 230,000 ounces of gold per year for over 18 years, establishing the project as a cornerstone asset for the company.

The financial commitments extend beyond development capital. A key upcoming milestone is the extension of the mining license from its current expiry in 2032 to 2062. Upon successful extension, Silvercorp is obligated to make an additional $60 million cash payment to the National Investment Agency of the Kyrgyz Republic, further cementing its long-term commitment to the country.

A New Model for Central Asian Investment?

The Silvercorp-Kyrgyzaltyn partnership could serve as a bellwether for foreign investment in Central Asia's mining sector. For decades, the region has been a paradox for mining companies: rich in untapped mineral wealth but often perceived as too risky due to political uncertainty and shifting regulations.

By embracing a joint venture model with a significant free-carried state interest from the outset, Silvercorp is adopting a framework that may become the new standard for resource development in the region. This structure provides the government with a clear and transparent stake in the economic upside, potentially reducing the likelihood of future disputes over taxation, royalties, or ownership that have plagued other projects in the past.

If successful, this model could demonstrate that it is possible to balance the profit motives of international corporations with the national development goals of host countries. The success of the Tulkubash and Kyzyltash projects under this JVC will be closely watched by other mining majors, policymakers, and development agencies as a potential template for attracting sustainable, long-term foreign direct investment while ensuring tangible benefits flow to the local economy and its people. The path forward involves considerable execution risk and capital outlay, but the strategic prize—a multi-decade, low-cost gold operation—is one Silvercorp is now positioned to claim.