ARIS MINING COMPLETES ACQUISITION TO INCREASE OWNERSHIP IN SOTO NORTE GOLD-COPPER PROJECT TO 51%
Aris Mining has completed the acquisition of an additional 31% interest in the Soto Norte gold-copper project in Colombia, raising its ownership in the joint venture to 51%.
This deal involves issuing 15,750,000 shares to Mubadala Investment Company, with an additional 6,000,000 shares upon receiving an environmental license. Mubadala retains a 49% stake.
The Soto Norte project is among South America's largest undeveloped underground gold projects, aiming for over 450,000 gold ounces annually at an AISC of US$471/oz across 11 years.
Aris Mining plans a scaled-down mining concept, focusing on reducing the environmental footprint and optimizing production with a longer plant life and higher-grade material targeting.
This acquisition aligns with Aris Mining's strategy to boost gold production and support local contract miners, enhancing economic development and environmental practices in the Soto Norte region.
- Aris Mining increased ownership in Soto Norte project to 51%, enhancing control over a major undeveloped gold project.
- Issuance of 15,750,000 shares to Mubadala, with an additional 6,000,000 shares upon environmental license, demonstrates continued investment and strategic partnership.
- The Soto Norte project anticipates over 450,000 gold ounces annually at an AISC of US$471/oz over 11 years, signaling substantial production and cost efficiency.
- New, optimized development plan includes reduced environmental footprint and longer plant life, potentially improving sustainability and operational efficiency.
- Issuance of additional shares could result in potential shareholder dilution.
- Aris Mining will sole fund certain operating costs during the pre-licensing period, potentially increasing financial strain.
Insights
The acquisition boosting Aris Mining's stake in the Soto Norte gold-copper project to 51% is a critical move. This consolidation of control implies that the company will now bear a larger share of both profits and risks associated with the project.
From a financial standpoint, issuing shares to Mubadala rather than paying cash preserves cash reserves, which can be advantageous for liquidity management, especially given the pre-licensing period costs they are shouldering. However, this dilutes existing shareholders' equity, potentially impacting share value in the short term.
Looking at the feasibility study, an average annual production of over 450,000 gold ounces at an AISC of
Investors should keep an eye on the environmental licensing milestones. These will be important for project advancement and could be a pivotal moment for stock performance.
The new, smaller-scale development plan for Soto Norte underscores a strategic pivot towards sustainability. The proposed reduction in the environmental footprint, the use of a paste backfill plant to limit surface tailings and replacing a tunnel with an aerial ropeway are commendable steps. These measures can potentially minimize environmental impacts and streamline permitting processes, essential in a region sensitive to ecological concerns.
It's notable that Aris Mining integrates local contract mining partners and supports the formalization of traditional miners. This approach may foster better community relations and sustainable economic development, aligning with global trends towards responsible mining.
For retail investors, the company's focus on reducing environmental risks can influence regulatory approvals and potentially attract environmentally conscious investors, positively affecting stock value in the long run.
The Soto Norte project's scale and Aris Mining's control increase position the company favorably within the competitive landscape of South American mining. Owning a majority stake in one of the largest undeveloped gold projects in the region could attract strategic partners, enhancing operational and financial synergies.
Moreover, by leveraging Mubadala's ongoing 49% interest, Aris Mining maintains an influential partner with deep pockets, which could be beneficial during high-capex phases like construction and ramp-up.
The partnership model and integration of local miners not only increase operational efficiency but also align with socio-economic policies, potentially reducing the risk of local opposition—a common challenge in mining projects.
Retail investors should consider the broader market context: gold and copper demand remains robust, driven by economic uncertainties and industrial uses, respectively. These dynamics can sustain or elevate the project's long-term value.
As consideration for the additional
- Aris Mining has issued 15,750,000 shares to a wholly-owned subsidiary of the
Abu Dhabi based investment company Mubadala Investment Company PJSC (Mubadala), which shares will be subject to a 12-month hold period. - An additional 6,000,000 shares will be issued to Mubadala on receipt of an environmental license for PSN.
- Mubadala is retaining a
49% interest in PSN. Aris Mining will sole fund certain operating costs on behalf of the joint venture during the pre-licensing period. Non-operating and project construction costs will be funded on a pro-rata ownership basis.
In March 2022, Aris Mining disclosed the results of mineral resource and reserve estimates and a Feasibility Study for the Soto Norte Gold Project in a NI 43-101 compliant Technical Report with an effective date of January 1, 2021 (the Feasibility Study). The Feasibility Study includes a 7,200 tonnes per day capacity processing plant with average annual production of over 450,000 gold ounces (oz) over an 11-year production period at average all in sustaining costs (AISC) of
In 2023, Aris Mining completed a technical and economic assessment of PSN that considered a scaled-down mining concept. To confirm and optimize our assessments and streamline permitting processes, we have decided to undertake Feasibility Study level work on a new, smaller scale development plan with optimizations including: (i) reducing the environmental footprint, (ii) building a smaller processing plant with a longer operating life, (iii) adopting a flexible mining method to target higher-grade material earlier in the mine life, (iv) installing a paste backfill plant to minimize surface tailings storage requirements and, (v) replacing the 6.9 km tunnel to connect the mine and the processing plant site with an aerial ropeway, a material movement approach utilized in
The Soto Norte region in
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1 See "Technical Disclosure and Qualified Person" section for full disclosure of the technical and scientific details. |
Technical Disclosure and Qualified Person
The technical information in this news release was reviewed and approved by Pamela De Mark, P.Geo, Senior Vice President, Geology and Exploration of Aris Mining, who is a Qualified Person as defined by NI 43-101. Unless otherwise indicated, the mineral resource and reserve estimates, scientific disclosure, and technical information included in this news release are based upon information included in the following NI 43-101 compliant technical report: "NI 43-101 Technical Report Feasibility Study of the Soto Norte Gold Project, Santander,
About Aris Mining
Aris Mining is a gold producer in the
Aris Mining promotes the formalization of traditional miners into contract mining partners as this process enables all miners to operate in a legal, safe and responsible manner that protects them and the environment.
Additional information on Aris Mining can be found at www.aris-mining.com, www.sedarplus.ca, and on www.sec.gov.
Forward-Looking Information
This news release contains "forward-looking information" or forward-looking statements" within the meaning of Canadian securities legislation. All statements included herein, other than statements of historical fact, including, without limitation, the issuance of 6,000,000 shares of Aris Mining on receipt of the environmental license, plans pertaining to PSN and the PFS and the details, benefits and timings thereof, the benefits of Aris Mining's partnership model, target production in 2026, expected completion of the
Forward looking information and forward looking statements, while based on management's best estimates and assumptions, are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Aris Mining to be materially different from those expressed or implied by such forward-looking information or forward looking statements, including but not limited to those factors discussed in the section entitled "Risk Factors" in Aris Mining's annual information form dated March 6, 2024 which is available on SEDAR+ at www.sedarplus.ca and in the Company's filings with the SEC at www.sec.gov.
Although Aris Mining has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information and forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information or statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information or statements. The Company has and continues to disclose in its Management's Discussion and Analysis and other publicly filed documents, changes to material factors or assumptions underlying the forward-looking information and forward-looking statements and to the validity of the information, in the period the changes occur. The forward-looking statements and forward-looking information are made as of the date hereof and Aris Mining disclaims any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements or forward-looking information contained herein to reflect future results. Accordingly, readers should not place undue reliance on forward-looking statements and information.
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SOURCE Aris Mining Corporation
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