Pan American Announces Divestment of MARA, Morococha, Agua de la Falda and Non-Controlling Equity Interests
- The divestment of non-core assets will provide substantial and immediate value to shareholders and maintain future upside through the retention of copper and gold royalties.
- The total cash proceeds of US$593 million will enhance the resilience of the balance sheet and provide increased capital to advance key strategic projects.
- The reduction of annual project development, reclamation, and care and maintenance costs will improve balance sheet strength and create enhanced opportunities for the Company.
- None.
- Divestment of non-core assets advances the Company's portfolio optimization strategy
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Total cash proceeds of
US strengthen the balance sheet$593 million - Reduces 2023 and future care and maintenance costs
"The sale of these non-core assets is aligned with our stated aim of optimizing our portfolio following the Yamana acquisition. These transactions not only reaffirm our commitment to our core business but also yield substantial and immediate value to our shareholders, while maintaining future upside through the retention of copper and gold royalties with strong counterparties," said Michael Steinmann, President and Chief Executive Officer of Pan American. "The consideration for the sale of MARA, coupled with the other sales, will yield total cash proceeds of
MARA
Pan American has entered into a binding agreement to sell its
MARA was initially established as a joint venture in December 2020 amongst Yamana, Glencore and Newmont Corporation ("Newmont"), following the integration of the Minera Alumbrera plant and mining infrastructure and the Agua Rica project. On September 23, 2022, Glencore announced that it had acquired Newmont’s
Under the terms of the agreement, at closing Glencore will pay
MARA feasibility studies, reclamation and care and maintenance ("C&M") costs for the Project for the three-month period ending June 30, 2023, amounted to
The closing of the transaction is subject to customary conditions and regulatory filings. Pan American expects the transaction to be completed in the third quarter of 2023.
Morococha
Pan American placed the Morococha mine on C&M in early 2022, while it evaluated alternative strategic opportunities for the asset following the closure of the Amistad processing plant, pursuant to an agreement with Aluminum Corporation of China ("Chinalco"). As previously disclosed, in June 2010, the Company finalized a framework agreement with Chinalco that entailed the relocation of core Morococha facilities, including the Amistad processing plant, in stages, to facilitate the incremental expansion of Chinalco’s Toromocho open pit copper mine.
On June 19, 2023, Pan American entered into a binding agreement to sell its
Under the terms of the agreement, Alpayana will acquire the shares of CMA in exchange for a cash consideration of
C&M costs for the Morococha mine for the six-month period ending June 30, 2023 amounted to
As a result of this executed agreement, the net assets of CMA, including the Morococha mine, will be classified as "held for sale", and accordingly will be presented separately under current assets and liabilities in the Company’s second quarter 2023 unaudited interim consolidated financial statements. Further, a net of tax impairment charge of
Agua de la Falda
Pan American has entered into a binding agreement with Rio Tinto Mining & Exploration Ltd. Agencia en Chile SPA ("Rio Tinto"), a subsidiary of Rio Tinto Limited, to sell its
Under the terms of the agreement, Rio Tinto will pay
The closing of the transaction is subject to the execution of definitive documentation and customary conditions. No regulatory approvals or filings are required. Pan American expects the transaction to be completed in the third quarter of 2023.
Equity Interests
During the second quarter of 2023, Pan American divested of a number of non-controlling equity investments for a total consideration of
About Pan American Silver
Pan American Silver is a leading producer of precious metals in the
Learn more at panamericansilver.com.
Cautionary Note Regarding Forward-Looking Statements and Information
Certain of the statements and information in this news release constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of applicable Canadian provincial securities laws. All statements, other than statements of historical fact, are forward-looking statements or information. Forward-looking statements or information in this news release relate to, among other things: the receipt of any necessary regulatory approvals and successful completion of the proposed transactions in respect of MARA, Morococha and Agua de la Falda (the "non-core assets"), as well as the anticipated terms and timing for the completion thereof; the anticipated use of proceeds, including to fully repay the amount drawn on our credit facility; the anticipated benefits from the completion of the sale of the non-core assets; and the impact of such transactions on Pan American’s future financial or operational performance.
These forward-looking statements and information reflect Pan American’s current views with respect to future events and are necessarily based upon a number of assumptions that, while considered reasonable by Pan American, are inherently subject to significant operational, business, economic and regulatory uncertainties and contingencies. These assumptions include: the ability to satisfy the closing conditions and, where necessary, receive regulatory approval, to complete the sale of the non-core assets; the impact of inflation and disruptions to the global, regional and local supply chains; tonnage of ore to be mined and processed; future anticipated prices for gold, silver and other metals and assumed foreign exchange rates; the timing and impact of planned capital expenditure projects, including anticipated sustaining, project, and exploration expenditures; the ongoing impact and timing of the court-mandated ILO 169 consultation process in
Pan American cautions the reader that forward-looking statements and information involve known and unknown risks, uncertainties and other factors that may cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements or information contained in this news release and Pan American has made assumptions and estimates based on or related to many of these factors. Such factors include, without limitation: the duration and effect of local and world-wide inflationary pressures and the potential for economic recessions; fluctuations in silver, gold and base metal prices; fluctuations in prices for energy inputs, labour, materials, supplies and services (including transportation); fluctuations in currency markets (such as the PEN, MXN, ARS, BOB, GTQ, CAD, CLP and BRL versus the USD); the duration and effects of COVID-19, and any other pandemics on our operations and workforce, and the effects on global economies and society; operational risks and hazards inherent with the business of mining (including environmental accidents and hazards, industrial accidents, equipment breakdown, unusual or unexpected geological or structural formations, cave-ins, flooding and severe weather); risks relating to the credit worthiness or financial condition of suppliers, refiners and other parties with whom Pan American does business; inadequate insurance, or inability to obtain insurance, to cover these risks and hazards; employee relations; relationships with, and claims by, local communities and indigenous populations; our ability to obtain all necessary permits, licenses and regulatory approvals in a timely manner; changes in laws, regulations and government practices in the jurisdictions where we operate, including environmental, export and import laws and regulations; changes in national and local government, legislation, taxation, controls or regulations and political, legal or economic developments in
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For more information:
Siren Fisekci
VP, Investor Relations & Corporate Communications
Ph: 604-806-3191
Email: ir@panamericansilver.com
Source: Pan American Silver
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