Canadian gold and silver producer Silvercorp Metals Inc. (TSX: SVM / NYSE American: SVM) has secured a critical milestone at its flagship Kyrgyzstan gold project, extending its mining license all the way to 2062 and giving the green light to begin Phase 1 construction — the first stage of development — at the Tulkubash deposit. The project is described by the company as one of the largest undeveloped gold assets in Central Asia.
The announcement, made on May 20, 2026, confirms that Silvercorp has paid $60 million in cash to the Kyrgyz government as required under a formal cooperation agreement signed with the National Investment Agency under the President of the Kyrgyz Republic. A further $10 million payment is due once certain additional project conditions are met, according to the company.
Gold was trading at approximately $4,503 per ounce as of May 20, 2026, according to Trading Economics — still more than 35% higher than a year ago, providing a strong pricing backdrop for new gold projects moving toward production.
A Government Partner With Skin in the Game
The ownership structure behind the Tulkubash project is one of its most distinctive features. Silvercorp operates through a joint venture company — formerly known as Chaarat ZAAV CJSC, now restructured as a formal JV entity — in which it holds a 70% controlling interest and acts as the day-to-day operator. The remaining 30% is held by Kyrgyzaltyn, a company wholly owned by the Kyrgyz Republic, meaning the Kyrgyzstan government itself is a direct partner in the project.
Kyrgyzaltyn’s stake is what is known in the industry as a free-carried interest — meaning the government does not contribute to the costs of building or running the mine, but still receives 30% of the profits when it produces. Think of it like a silent business partner who doesn’t put money in but shares in the returns. For investors, this arrangement is significant because it gives the Kyrgyz government a direct financial reason to want the project to succeed rather than interfere with it.
That context matters in this part of the world. In 2021, Kyrgyzstan nationalised the Kumtor gold mine — which had been operated by Canadian company Centerra Gold — in a move that wiped billions of dollars in value and sent a chill through investor confidence in the region. Silvercorp’s decision to structure its deal with the government as a direct financial partner from day one is a deliberate response to that history, reducing the risk of a similar outcome.
The Project and Why the Location Matters
The Tulkubash and Kyzyltash gold deposits are located roughly 490 kilometres southwest of Bishkek, Kyrgyzstan’s capital, in the Tien Shan mountain range — a vast geological belt stretching across Central Asia that has been one of the region’s most productive sources of gold for decades.
According to Silvercorp Chair and CEO Dr. Rui Feng, these are “the largest undeveloped gold deposits in the West Tien Shan gold belt.” The mining license covers approximately 7 square kilometres hosting the two core deposits, while surrounding exploration licenses cover a further 27.42 square kilometres containing the Karator and Ishakuld gold zones — additional targets that give the project longer-term upside beyond the main resource.
Importantly, this is not a project starting from zero. Former owner Chaarat Gold Holdings spent approximately $174 million on the project between 2002 and Silvercorp’s entry in 2026 — funding exploration drilling, feasibility studies (the detailed engineering and financial analysis done before committing to build a mine), road access, and site infrastructure. Silvercorp is stepping into a well-advanced asset rather than raw, unexplored ground.
Silvercorp acquired its 70% stake in January 2026 for total consideration of approximately $162 million. The May 20 announcement represents the formal completion of key legal and structural steps required to move the project forward.
Phase 1: The Fast Track to First Gold
The JV company has now held its first official shareholder and board meetings. Silvercorp’s nominees have been appointed as General Manager and CFO of the joint venture, and the board has formally approved Phase 1 development of the Tulkubash project for 2026 to 2027.
Phase 1 focuses specifically on the oxide ore at Tulkubash. Oxide ore — found closer to the surface — is simpler and cheaper to process than deeper sulfide ore, which requires more complex and expensive treatment. Processing oxide gold typically involves heap leaching or carbon-in-leach methods — essentially washing crushed ore with a chemical solution to extract the gold. This makes oxide deposits the natural starting point for new mining operations because they require less upfront capital and can reach production faster.
Phase 2, which targets the deeper Kyzyltash sulfide deposit, is the larger long-term opportunity. Based on a 2016 pre-feasibility study — a detailed technical and financial assessment prepared before a final construction decision is made — by China’s NERIN design institute, Phase 2 could involve approximately $400 million in investment to build a 3 to 4 million tonne per year mining operation. Note: this study has not been updated to current NI 43-101 standards, the technical reporting standard required for Canadian-listed mining companies. That phase is not expected to begin until around 2028 at the earliest, with annual gold production of an estimated 190,000 to 230,000 ounces potentially starting from 2031.
The Gold Market Backdrop
The Silvercorp announcement arrives at a time when gold prices remain at historically elevated levels. The metal was trading at approximately $4,503 per ounce as of May 20, 2026, according to Trading Economics, and has gained more than 35% over the past year.
Major financial institutions have published bullish price outlooks for the rest of 2026. JP Morgan has forecast gold could reach $6,300 per ounce by year end, while Deutsche Bank has a $6,000 target and UBS and Société Générale both sit at around $6,000 to $6,200, according to published analyst reports. It is important to note these are forecasts, not guarantees — commodity prices are volatile and can move sharply in either direction depending on interest rate decisions, geopolitical developments, and broader market conditions.
At prices above $4,500 per ounce however, the economics of developing a long-tenured Central Asian gold asset look materially stronger than at the $2,000 to $3,000 levels that defined much of the previous decade.
What to Watch Next
The most important near-term signal for investors following this story is the commencement of actual construction activity at Tulkubash during 2026. Silvercorp has board approval and management in place — the next milestone is ground being broken and a clearer picture of Phase 1 capital costs and production targets emerging.
Also worth monitoring is the $10 million milestone payment still owed to the Kyrgyz government, which will indicate how quickly the remaining project conditions are being satisfied.
Dr. Feng stated in the May 20 release: “With Kyrgyzaltyn as our partner, all interests are aligned for us to begin construction, and ultimately achieve production to establish a win-win enterprise.”
Silvercorp’s full regulatory filings are available on SEDAR+ (www.sedarplus.ca) under the company’s issuer profile, and on the company’s investor relations page at silvercorpmetals.com.
SOURCES
1. Silvercorp press release, May 20, 2026 — PR Newswire: https://www.prnewswire.com/news-releases/silvercorp-announces-extension-of-mining-license-for-the-tulkubashkyzyltash-gold-projects-kyrgyzstan-302778026.html
2. Silvercorp original acquisition announcement, January 20, 2026 — PR Newswire: https://www.prnewswire.com/news-releases/silvercorp-acquires-70-interest-in-the-tulkubashkyzyltash-gold-projects-kyrgyzstan-302665133.html
3. Gold spot price, May 20, 2026 — Trading Economics: https://tradingeconomics.com/commodity/gold
4. Gold price forecasts — JP Morgan, Deutsche Bank, UBS, Société Générale, via published analyst reports, May 2026
5. Silvercorp regulatory filings — SEDAR+: https://www.sedarplus.ca
6. Silvercorp corporate website: https://www.silvercorpmetals.com
7. Project history and Tien Shan belt context — Mining South East Europe: https://www.miningsee.eu/silvercorp-expands-global-footprint-with-major-gold-deposit-development-in-kyrgyzstans-tien-shan-belt/
8. Project background — Times of Central Asia: https://timesca.com/canadian-silvercorp-to-develop-major-gold-deposits-in-kyrgyzstan/
DISCLAIMER
This article is based on press releases, regulatory filings, and publicly available information. All information was current as of May 20, 2026. Gold price data is sourced from Trading Economics and reflects market conditions at the time of writing. Securities referenced in this article include Silvercorp Metals Inc. (TSX: SVM / NYSE American: SVM). Mining Markets Report has not received compensation from Silvercorp Metals Inc. or any affiliated party in connection with this coverage. Resource estimates, mineral reserve figures, and production targets referenced in this article are as reported by the company and have not been independently verified by Mining Markets Report. Phase 2 production projections are based on a 2016 pre-feasibility study by China’s NERIN design institute and have not been updated to current NI 43-101 standards, as stated by the company. Forward-looking statements attributed to Silvercorp Metals involve known and unknown risks and uncertainties, and actual results may differ materially from those projected. Institutional gold price forecasts referenced in this article represent the published opinions of third-party analysts at the time of writing and are not guarantees of future commodity performance. The information provided in this article is for informational and educational purposes only and does not constitute financial, investment, or professional advice. Readers are encouraged to conduct their own due diligence and consult a qualified financial advisor before making any investment decision. For full terms, see our Disclaimer.