Pan American Silver Corp will sell a 56 per cent stake in a copper project in Argentina for $475m to Swiss commodities giant Glencore, as part of its plan to hive off certain non-core assets.
The purchase of the stake in Minera Agua Rica Alumbrera (MARA) will give Glencore complete ownership of the project. Glencore had acquired its initial 18.75 per cent stake in the project from Newmont Corp.
Glencore’s purchase will allow it to expand its portfolio in copper, which is set to play a crucial role in the transition to a greener economy. Big miners are seeking assets with longer mine life and high-quality grade ore to meet the growing demand for the red metal.
Glencore also bought out a remaining 18 per cent stake in Polymet Mining in July and has been circling Canadian copper miner Teck Resources.
The MARA joint venture in Argentina’s Catamarca province, with proven and probable mineral reserves of 5.4m tonnes of copper and 7.4m ounces of gold, was established in December 2020 by Glencore, Newmont and Yamana Gold Inc, which was acquired by Agnico Eagle Mines, and Pan American Silver in November last year.
Pan American expects the Glencore deal to be completed in the third quarter of 2023.
“The sale of these non-core assets is aligned with our stated aim of optimising our portfolio following the Yamana acquisition,” said Pan American chief executive Michael Steinmann in a statement, adding that the cash proceeds will be used to fully repay the amount drawn on its credit facility.
Other asset sales announced on Monday, for a total $118m, include its 92.3 per cent interest in its unit that owns Morococha mine in Peru for $25m, a 57.75 per cent interest in a Chilean company that owns Jeronimo project in northern Chile for $45.55m to a unit of Rio Tinto, and a number of non-controlling equity investments for a $47.1m.
Reuters – Arshreet Singh