Pan American Silver, the Canadian precious metals miner, has announced that it will be selling a number of assets in a deal worth $593 million. This move is part of the company's strategy to strengthen its balance sheet and focus on its core assets following the recent acquisition of Yamana Gold.
As part of the deal, Pan American Silver will be selling its Mara project in Argentina, Morococha mine in Peru, and Agua de la Falda project in Chile. However, the company will still retain future upside through copper and gold royalties.
The proceeds from the sale will be used to repay the amount drawn on Pan American Silver's credit facility and increase its cash position. Additionally, this will also lead to a reduction in annual project development, reclamation, and care and maintenance costs. The company estimates that these costs totaled $15.7 million in the second quarter of this year for the Mara and Morococha projects.
By strengthening its balance sheet, Pan American Silver will have increased capital to advance key projects. This strategic move will help the company further solidify its position in the market and continue to drive growth.
Overall, this deal marks an important step for Pan American Silver as it focuses on optimizing its portfolio and maximizing value for its shareholders.
Pan American Announces Sale of Mining Assets
Pan American, a leading mining company, has recently finalized several significant deals to sell its mining interests in various projects. These agreements are part of Pan American's strategy to optimize its portfolio and focus on core assets.
Sale of Mara Project Stake
Pan American has entered into a binding agreement with Glencore, a global commodities trader, to sell its majority stake in the Mara project. The company will sell slightly over 56% of its stake to Glencore for a cash consideration of $475 million. Additionally, Pan American will retain a royalty of 0.75% on copper net smelter returns throughout the life of the mine, which it has the freedom to transfer.
The Mara project was acquired by Pan American through its acquisition of Yamana, which was concluded in March.
Divestment of Agua de la Falda Stake
Pan American has also reached a binding agreement with Rio Tinto to divest its nearly 58% interest in Agua de la Falda, a Chilean company that holds the historical Jeronimo project and several adjacent concessions. Under this agreement, Pan American will receive $45.6 million in cash. Additionally, the company will retain royalties on precious metals and base metals produced from certain mineral concessions, with rates set at 1.25% and 0.2%, respectively.
Sale of Minera Argentum Subsidiary
In addition to the above transactions, Pan American has finalized a binding deal with Alpayana, a Peruvian company, to sell approximately 92% of its interest in Minera Argentum. Minera Argentum is Pan American's subsidiary in Peru and owns the Morococha mine. The sale is valued at $25 million.
Pan American had temporarily placed the Morococha mine on care and maintenance at the beginning of 2022. This decision was made as part of the company's assessment of alternative strategic opportunities for the asset, following the Amistad processing plant's closure under an agreement with Aluminum Corporation of China.
Overall, these divestments and sales reflect Pan American's commitment to efficiently manage its portfolio and allocate resources to projects with the highest potential for growth and profitability. The transactions will contribute to Pan American's strategic objectives and future success in the mining industry.
Pan American Reports Strong Sales in Q2
During the second quarter of the year, Pan American reported impressive sales and financial success. Notably, the company sold a number of noncontrolling equity investments, resulting in a total revenue of $47.1 million.
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