11:17 AM EDT, 07/08/2024 (MT Newswires) -- National Bank of Canada on the weekend rated Adventus Mining ( ADVZF ) at tender with a $0.55 price target amid delays in its planned merger with Silvercorp Metals ( SVM ) .

The bank said Silvercorp advised Adventus it believes a "material adverse effect" is present and the company is not prepared to close the arrangement until this is resolved.

The bank expects the two parties to negotiate a two- to three-month deferral in the outside date to allow time for Silvercorp to ease or perhaps validate its concerns with regard to the permitting status for the El Domo project in Ecuador.

Adventus' El Domo project is currently involved in a legal action that seeks to void the environmental license issued for the development. The company said cases like this are typically resolved in five to nine months.

But Silvercorp advised Adventus that the action constitutes a "material adverse effect" and it is not prepared to close the deal until all conditions are met.

"While the situation is still in flux, we are not yet convinced that a material adverse event is present, though we may be many months away from gaining clarity on the matter," National Bank said. "Silvercorp may also aim to gain better negotiating leverage from its standpoint."

Adventus' share were last seen down $0.12, or 24%, to $0.37 on the TSX Venture Exchange.

Price: 0.37, Change: -0.12, Percent Change: -24.49