Pan American Silver Sells $593 Million in Assets to Bolster Balance Sheet
31 July 2023 - 9:34PM
Dow Jones News
By Robb M. Stewart
Pan American Silver has struck deals totaling $593 million to
sell a number of assets as it moves to strengthen its balance sheet
and focus on core assets following the acquisition this year of
Yamana Gold.
The Canadian precious metals miner said Monday it agreed to sell
its Mara project in Argentina, Morococha mine in Peru and Agua de
la Falda project in Chile but will retain future upside through
copper and gold royalties.
The cash proceeds will allow Pan American to repay the amount
drawn on its credit facility and increase its cash position, while
reducing annual project development, reclamation and care and
maintenance costs, which for Mara and Morococha totaled $15.7
million in the second quarter of this year, the company said. The
strengthened balance sheet will provide increased capital to
advance key projects, it added.
Pan American said it reached a binding agreement to sell its
slightly more than 56% stake in the Mara project to Glencore, which
already has an almost 44% interest in Mara, for $475 million in
cash and a life-of-mine copper net smelter return royalty of 0.75%
that Pan American will have the right to freely transfer. The stake
in Mara was picked up by Pan American with its acquisition of
Yamana, which closed at the end of March.
The company said it entered a binding agreement with Rio Tinto
to sell its almost 58% interest in Agua de la Falda, a Chilean
company that holds the historical Jeronimo project and several
adjoining concessions, for $45.6 million in cash. Pan American was
also granted a royalty of 1.25% on all precious metals and royalty
of 0.2% on all base metals on production from certain mineral
concessions.
Pan American said it also has a binding deal to sell its roughly
92% interest in Minera Argentum, its Peruvian subsidiary that owns
the Morococha mine, to Peru's Alpayana for $25 million. Pan
American placed the Morococha mine on care and maintenance in early
2022 while it evaluated alternative strategic opportunities for the
asset following the closure of the Amistad processing plant under
an agreement with Aluminum Corporation of China.
Also during the second quarter of the year, Pan American said it
sold a number of noncontrolling equity investments for a total of
$47.1 million.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
July 31, 2023 07:19 ET (11:19 GMT)
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