Multinational commodity trader and mining group Glencore will acquire a 56.25% stake in the Mara copper and gold project in Argentina. The Swiss-headquartered group struck the Deal with Canada’s Pan America. In a boost for Glencore stock, this agreement gives them sole ownership of the site.
The deal stipulates that Glencore will pay Pan American $475 million for the stake upon the transaction’s closing, expected in Q3. Glencore stated on July 31 the agreement will also grant Pan American 0.75% copper of the net smelter return royalty.
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Most Analysts Have High Hopes for Site
Mara is in northwestern Argentina’s Catamarca Province, which borders Chile. The site contains proven and probable mineral reserves of 5.4 million metric tons of copper. Furthermore, it also boosts 7.4 million ounces of gold in over 1.1 billion metric tons of ore.
Indeed, analysts expect Mara to be in the top-25 global copper producers when operational. Reports say that the site has an expected average copper production exceeding 200 metric tons per annum (with further material by-product credits) over the first 10 full years.
Moreover, the site will also integrate the Alumbrera concentrator plant. This facility lies at the site of the exhausted mine of the same name. Maps show the distance between the two plants is about 145 kilometers by road. One analyst told MetalMiner that there was even talk about constructing a conveyor belt between the mine and plant, which is just 30 kilometers away.
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One of Several Deals that Could Impact Glencore Stock Price
In 2020, Glencore, Yamana, and the Argentine federal government saved the Alumbrera concentration plant. This was accomplished by integrating it with the unexploited Agua Rica copper mine, the source added. Later that same year, the site became a joint venture between Glencore, Yamana, and Newmont.
“Glencore acquired Newmont’s 18.75% stake in October 2022, bringing its shareholding to 43.75%,” Glencore noted. “Pan American acquired Yamana Gold’s 56.25% stake as part of its acquisition of Yamana Gold Inc. in March 2023.”
The source also believed that Glencore’s new project would prove viable. “Now that they have 100%, they can do what they want on their timetable,” he said if the acquisition.
Back in April, Glencore also began an unsolicited bid for Canadian base metals producer Teck. Furthermore, that company has two copper mines in Chile and one in Canada. According to industry watchers, the move was an attempt to corner the market for the base metal. if successful, this would have massive implications for the Glencore stock price. The Chilean operations produce copper cathode, while the Highland Valley Copper mine produces copper concentrate.
Glencore Stock and Project Insights
Copper’s three-month closing price on the London Metal Exchange was $8,662.50 per metric ton on July 28. According to data from that bourse, this was an increase of 4.17% from the $8,315.50 seen on June 30.
Pan America’s agreement to sell its stake in Mara was just one of three deals that the Canadian company announced on July 31. It also announced the sale of its 57.75% stake in Agua de la Falda, a Chilean company that holds the Jeronimo project in the Atacama region, to Rio Tinto for a total of $45.5 million. Pan America notes that the National Copper Corporation of Chile holds the remaining percentage in that project.
In addition to this, Peruvian mining company Alpayana also entered into a binding agreement to acquire a 92.3% stake in Compañia Minera Argentum to Pan America’s Peruvian subsidiary, which also owns a Morococha mine.
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