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Silvercorp Metals (TSX: SVM) and Guyana Goldfields (TSX: GUY) have agreed to amend the terms of their merger arrangement, which would see Silvercorp making a significantly higher offer than the previously announced C$105 million deal.

The parties came to a new agreement following receipt by Guyana Goldfields of an unsolicited all-cash proposal from a third party to acquire the company. Last week, Guyana Goldfields rejected an all-stock offer from Gran Colombia Gold (TSX: GCM) as it was keen on pursuing a merger with Silvercorp.

Under the new terms, Guyana Goldfields shareholders will now receive, for each share held, C$0.25 in cash and 0.1849 of a Silvercorp common share for total consideration of C$1.30 per share. The improved offer would value Guyana Goldfields at approximately C$227 million.

After accounting for Silvercorp’s existing shares, the cash consideration of C$0.25 implies a total cash component of C$39.5 million, and the share consideration of C$1.05 implies a total share component of 29.2 million shares, Silvercorp said in a statement. 

Based on these metrics, existing Guyana Goldfields shareholders would own 14.4% of Silvercorp’s pro forma basic shares outstanding following the transaction.

In the original offer, Guyana Goldfields shareholders were given the option to receive either C$0.60 in cash or 0.1195 of a Silvercorp common share, subject to a maximum cash consideration of C$33.2 million, which would lead to ownership of 7.1% of Silvercorp’s pro forma basic shares outstanding, assuming maximum cash consideration.

The amended agreement also increases the termination fee to C$9.0 million, which is to be paid by Guyana Goldfields if the agreement is terminated in certain specified circumstances.

As of Monday, Silvercorp holds approximately 16.55 million Guyana Goldfields shares, representing 9.48% of those issued and outstanding.

Shares of Silvercorp jumped as high as 10.6% on Monday following the amended merger. Guyana Goldfields’ stock was also up 2.2% on the TSX. The mining firms have market capitalizations of C$1.1 billion and C$164.1 million respectively.