Pan American Silver (TSX:PAAS) has sold its 100% interest in La Arena, which owns La Arena Gold Mine and the La Arena II Project in Peru, to a subsidiary of Chinese multinational Zijin Mining Group (SSE:601899) for US$295 million ($451 million).
Zijin will pay US$245 million in cash and grant Pan American a life-of-mine gold net smelter return royalty of 1.5% for the La Arena II Project. Once La Arena II begins production, Zijin will provide an additional US$50 million cash contingent payment.
Pan American expects the transaction to be completed in Q3 2024.
The La Arena property sits on the La Libertad province of Peru and comprises the La Arena Gold Mine and the La Arena II Project.
Pan American acquired the mine when it purchased Tahoe Resources in February 2019 for just over US$1 billion. Since then 535,521 ounces of gold have been added through exploration. The company has also extended the mine life from 2021 to 2026, with the potential for further extension.
Pan American Silver is a producer of silver and gold in the Americas, with operating mines in Canada, Mexico, Peru, Brazil, Bolivia, Chile, and Argentina.
The company also owns the Escobal Mine in Guatemala which is currently not in operation.
Write to Adam Drought at Mining.com.au
Images: Pan American Silver
