Pan American Silver has agreed to divest stakes in non-core assets including the Mara project in Argentina, the Morococha mine in Peru and the Agua de la Falda project in Chile.
The deal consideration for the divestment of Mara, along with the other sales, will lead to total cash proceeds of $593m (C$786.26m) for Pan American Silver.
The sale of these non-core assets forms part of Pan American Silver’s aim to optimise its portfolio following the acquisition of Canada’s Yamana Gold.
Pan American president and CEO Michael Steinmann said: “These transactions not only reaffirm our commitment to our core business but also yield substantial and immediate value to our shareholders while maintaining future upside through the retention of copper and gold royalties with strong counterparties.”
The company has signed an agreement to sell a 56.25% stake in its Mara project in Catamarca, Argentina, to Glencore International for a cash consideration of $475m.
Upon completion of this deal, Glencore will have a 100% stake in the Mara project.
Pan American will have a life-of-mine copper net smelter return (NSR) royalty of 0.75%.
Pan American also signed an agreement to sell a 92.3% stake in its subsidiary Compañia Minera Argentum, which owns the Morococha mine, to Peruvian mining company Alpayana for a $25m cash consideration.
The Morococha mine was placed on care and maintenance in early 2022 as Pan American assessed alternative strategic opportunities. This was due to the closure of the Amistad processing plant.
Furthermore, Pan American signed a deal with Rio Tinto subsidiary Rio Tinto Mining & Exploration Ltd. Agencia en Chile SPA to sell a 57.75% interest in its Chilean company Agua de la Falda (ADLF) for $45.55m.
ADLF owns the Jeronimo project in Chile’s Atacama region, as well as several adjoining concessions, in which Pan American indirectly holds a 100% stake.
Pan American will receive an NSR royalty of 1.25% on all precious metals and an NSR royalty of 0.2% on all base metals.
The deals are scheduled for completion in the third quarter of this year.
In Q2 2023, Pan American sold a number of non-controlling equity investments for a total amount of $47.1m.
