…board to study proposal against Silvercorp Metal’s agreement

Guyana Goldfields Inc said it has received an unsolicited proposal from Gran Colombia Gold Corp. (“Gran Colombia”) to acquire all of the issued and outstanding common shares of the company at a share exchange ratio of 0.142 Gran Colombia shares for each Guyana Goldfields share (the “Gran Colombia Proposal”).

The Gran Colombia Proposal, which was announced on Tuesday by Gran Colombia, is conditional upon the completion of Gran Colombia’s proposed concurrent acquisition of Gold X Mining Corp. (TSXV: GLDX, OTCQX: SSPXF).

On April 27, 2020, the Company and Silvercorp Metals Inc. (“Silvercorp”) (TSX/NYSE American: SVM) announced a definitive agreement (the “Arrangement Agreement”) pursuant to which Silvercorp has agreed to acquire all of the issued and outstanding shares of Guyana Goldfields by way of a plan of arrangement under the Canada Business Corporations Act.

Under the terms of the transaction, each holder of Guyana Goldfields shares will have the option to receive, for each Guyana Goldfields share held, C$0.60 in cash or 0.1195 of a Silvercorp common share (valued at C$0.60 based on the volume weighted average price for Silvercorp common shares for the 20 trading days ended April 24, 2020), subject to a maximum cash consideration of C$33.2 million. If all Guyana Goldfields shareholders elect to receive cash, consideration for each share will consist of C$0.20 in cash and 0.0796 of a Silvercorp common share (valued at C$0.40 based on the volume weighted average price for Silvercorp common shares for the 20 trading days ended April 24, 2020).

The Company’s board of directors (the “Board”), in consultation with its legal counsel and financial advisors, is reviewing the Gran Colombia Proposal to determine if it constitutes a “Superior Proposal” as defined in the Arrangement Agreement. The Board will provide an update to shareholders regarding its determination in due course and does not intend to provide further updates or comments with respect to the foregoing except as required by the terms of the Arrangement Agreement or by law.

The Arrangement Agreement remains in effect and the Board has not changed its recommendation in support of the transaction with Silvercorp. There can be no assurance that the Gran Colombia Proposal will result in termination of the Arrangement Agreement and the execution of a definitive agreement with Gran Colombia. Guyana Goldfields Inc. is a Canadian based gold producer primarily focused on the exploration, development and operation of gold deposits in Guyana, South America.