Pan American Silver Corporation said on Monday it will sell a 56% stake in a copper project in Argentina for $475m to Swiss commodities giant Glencore as part of its plan to hive off certain noncore 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% stake in the project from Newmont.
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% stake in PolyMet Mining in July and has been circling Canadian copper miner Teck Resources. Glencore’s shares were up 1.1% at £471.50.
The Mara joint venture in Argentina’s Catamarca province, with proven and probable mineral reserves of 5.4-million tonnes of copper and 7.4-million ounces of gold, was established in December 2020 by Glencore, Newmont and Yamana Gold, which was acquired by Agnico Eagle Mines and Pan American Silver in November 2022.
Pan American expects the Glencore deal to be completed in the third quarter of 2023.
“The sale of these noncore assets is aligned with our stated aim of optimising our portfolio following the Yamana acquisition,” said Pan American CEO 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 the 92.3% interest in its unit that owns Morococha mine in Peru for $25m, a 57.75% 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 $47.1m.
Reuters
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