Pan American Silver Corp. announced that it will sell La Arena SA, owner of the La Arena gold mine as well as the La Arena II project in Peru, to Jinteng (Singapore) Mining Pte. Ltd., a subsidiary of Zijin Mining Group Co. for $245 million in cash upfront and a contingent payment of $50 million.
“With the sale of La Arena, we continue to deliver on our strategy of optimizing our portfolio, following the Yamana transaction, while maintaining future growth through royalty retention,” said Michael Steinmann, president and CEO, Pan American Silver. “The proceeds from the transaction will further strengthen our financial position and enable us to meet our capital allocation priorities of investing in high-quality assets, reducing debt and returning capital to our shareholders.”
Under the terms of the agreement, at closing Zijin will pay $245 million in cash and will grant Pan American a life-of-mine net gold 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 $50 million in cash. Closing of the transaction is subject to customary conditions and receipt of regulatory approvals. Pan American said it expects the transaction to be completed in Q3 2024.
The La Arena mining operation is located in the La Libertad province of Peru. Since acquiring it from Tahoe Resources in 2019, Pan American Silver said it has successfully added more than 535,000 oz of gold through exploration and extended the mine life from 2021 to 2026, with potential for further extension.
