The transaction now has all of the necessary regulatory approvals and is expected to close by the end of the fourth quarter of 2024. Under the terms of the agreement for the La Arena sale, upon closing, Zijin will pay US$245 million in cash and grant to Pan American a life-of-mine gold net smelter return royalty of 1.5% for the La Arena II project. Upon commencement of commercial production from the La Arena II project, the agreement provides for an additional contingent payment from Zijin of US$50 million in cash.
Key takeaways:
- Pan American Silver Corp. has received approval from the Government of Canada for the sale of its 100% interest in La Arena S.A., which owns the La Arena gold mine and the La Arena II project in Peru, to Jinteng (Singapore) Mining Pte. Ltd., a subsidiary of Zijin Mining Group Co., Ltd.
- The approval is subject to a joint undertaking from Pan American and Zijin to enter into an offtake agreement in respect of the La Arena II project, which will enable Pan American to secure 60% of the future copper concentrate supply from the La Arena II project on commercial terms for sale in North American markets.
- The transaction now has all of the necessary regulatory approvals and is expected to close by the end of the fourth quarter of 2024.
- Under the terms of the agreement for the La Arena sale, upon closing, Zijin will pay US$245 million in cash and grant to Pan American a life-of-mine gold net smelter return royalty of 1.5% for the La Arena II project.