Pan American Silver (TSX:PAAS,NASDAQ:PAAS) has announced the sale of its 100 percent interest in La Arena, including the La Arena gold mine and the La Arena II project in Peru, to Singapore’s Jinteng Mining.
Jinteng is a subsidiary of Zijin Mining Group (OTC Pink:ZIJMF,SHA:601899).
Zijin will pay US$245 million cash upfront and grant Pan American a life-of-mine gold net smelter return royalty of 1.5 percent for the La Arena II project upon the deal closing. Additionally, upon the commencement of commercial production from the La Arena II project, an additional contingent payment of US$50 million in cash will be made.
Pan American expects the deal to be finalized in the third quarter of 2024.
‘With the sale of La Arena, we continue to deliver on our strategy to optimize our portfolio, following the Yamana transaction, while maintaining future upside through the retention of royalties,’ President and CEO Michael Steinmann stated in a company press release on Wednesday (May 1).
‘Proceeds from the transaction will further strengthen our financial position and allow us to deliver on our capital allocation priorities of investing in high-quality assets, debt reduction and returning capital to our shareholders.’
The La Arena property, situated in the La Libertad province of Peru, has seen significant development under Pan American’s ownership since its acquisition of previous owner Tahoe Resources in 2019.
Despite the sale of La Arena, Pan American Silver retains a strong foothold in the sector, with interests in exploration and development projects across the region. The company is planning expansions at its Huarón silver mine, also in Peru.
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
This post appeared first on investingnews.com