VANCOUVER, BC, May 23, 2024
/PRNewswire/ - Aris Mining Corporation (Aris Mining or the Company)
(TSX: ARIS) (NYSE-A: ARMN) announces that it has entered into a
binding agreement with MDC Industry Holding Company LLC (Mubadala),
a wholly-owned subsidiary of the Abu
Dhabi based investment company Mubadala Investment Company
PJSC, whereby, subject to certain customary conditions, Aris Mining
will acquire an additional 31% joint venture interest in the Soto
Norte gold-copper project in Colombia (Soto Norte or PSN) and amend the
current Joint Venture Agreement to account for this change in
ownership. Soto Norte is one of the largest undeveloped underground
gold projects in South America,
set to employ modern and sustainable mining practices.
- Acquisition of 51% of PSN and Share Exchange: Aris
Mining will acquire an additional 31% joint venture interest in PSN
from Mubadala, bringing its total ownership to 51%. In exchange,
Aris Mining will issue 15,750,000 shares to Mubadala, representing
an approximate 9.9% ownership stake based on Aris Mining's issued
and outstanding shares as of March 31,
2024, with an additional 6,000,000 shares to be issued on
receipt of an environmental license for PSN.
- New, Smaller-Scale Development Plan: Aris Mining has
completed optimization studies of a smaller, more efficient
development plan for PSN. Key changes include reducing the
environmental footprint, building a smaller processing plant with a
longer operating life, adopting a flexible mining method to target
higher-grade material earlier in the mine life, and installing a
paste backfill plant to minimize surface tailings storage
requirements.
- Strategic and Operational Benefits: With a 51%
controlling interest, Aris Mining will integrate the PSN
development team into its management structure and procedures,
enhancing operational efficiencies and creating synergies.
Aris Mining CEO Neil Woodyer
stated: "As the only mining company with operational experience to
own and operate Soto Norte, we believe a new, smaller-scale
development plan with a reduced environmental footprint is the
right path forward. Aris Mining also plans to incorporate
processing solutions for contract mining partners into the design
and development of Soto Norte, following the successful partnership
model developed at our Segovia Operations in Colombia. Based on the attractive results of
our preliminary work, we are initiating a Pre-Feasibility Study
(PFS) of the new development plan, which is expected to be complete
by early 2025.
In support of this plan, we are delighted to become the 51%
controlling shareholder of the Soto Norte joint venture at closing,
enabling Aris Mining to develop this very attractive project."
Soto Norte Transaction
- On closing, Aris Mining will issue 15,750,000 common shares to
Mubadala. These shares will be subject to a 12-month hold period,
inclusive of a four-month statutory hold period and an additional
eight-month contractual restriction on transfer.
- Following receipt of an environmental license to develop PSN,
Aris Mining will issue an additional 6,000,000 common shares to
Mubadala, which together with the 15,750,000 common shares issued
at closing would increase Mubadala's ownership stake to
approximately 13% based on Aris Mining's issued and outstanding
shares as of March 31, 2024.
- The current market value of the 21,750,000 Aris Mining shares
to be issued to Mubadala is US$90
million.
- On closing, Aris Mining will hold a 51% interest in PSN and
Mubadala will retain a 49% interest. The current option held by
Aris Mining to acquire an additional 30% interest in PSN will be
terminated. Aris Mining will continue to be the operator of
PSN.
- Aris Mining and Mubadala have mutual right-of-first-offer
(ROFO) rights, should a partner choose to exit the joint
venture.
- As a result of Aris Mining integrating the PSN development team
into its management structure and procedures, 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.
- Closing of the transaction is expected to occur in June 2024 following satisfaction of customary
closing conditions, including execution of definitive documentation
related to the issuance of the shares and approval of the Toronto
Stock Exchange and the NYSE American.
Soto Norte Project and Planned
Optimizations
In March 2022, Aris Mining
disclosed the results of mineral resource and reserve estimates and
the results of 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 (tpd)
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 US$471/oz from a 5.0 million ounce mineral
reserve1.
In 2023, Aris Mining commissioned a technical and economic
assessment of PSN that considered a scaled-down mining concept.
Aris Mining is now commissioning a new PFS and NI 43-101 compliant
Technical Report for the scaled-down concept, both of which are
expected to be completed in Q1 2025. The new PFS will include the
assessment of the key project optimizations described in Table
1.
Table 1: Key project optimizations to be evaluated in the new
PFS
Optimized
underground
mining
strategy
prioritizes
initial access to
a
higher grade
zone
|
There are two main
parallel mineralized zones at PSN and each has a strike length of
approximately 2.0 km. The revised underground mining strategy
prioritizes initial access to the higher grade zone, which can be
quickly accessed from an existing portal.
The revised plan is
expected to sustain a mining rate approaching 2.0 million tonnes of
mill feed and waste per year.
|
Change of
mining
method
|
The mining method for
the Feasibility Study was modified Avoca, which required a
significant amount of additional waste, sourced from underground
waste quarry stopes, to provide backfill and a base for
mining.
The proposed mining
method for the new PFS is long hole open stoping (LHOS) targeting
higher grade stopes in the upper levels of the mine early in the
mine life and utilizing pillars for support in the first stage of
mining. Paste backfill will be utilized in the second stage of
mining while the support pillars are systematically
extracted.
|
Defer
underground
paste fill
plant
|
After installation of
the paste fill plant, the mining method is proposed to change to
LHOS and paste fill, to increase overall mining recovery
while reducing the upfront capital
requirement.
|
Smaller
processing
plant
|
The proposed processing
plant is expected to have a 2,750 tpd capacity, approximately 60%
smaller than the Feasibility Study design, with a longer operating
life.
|
Aerial
ropeway
proposed to move
mill
feed from the
existing
portal to
the
processing
plant
|
Elimination of the 6.9
km tunnel, which was to be created by way of a tunnel boring
machine (TBM), accelerating construction timelines and reducing
capital costs. Ropeway technology is currently in use in Colombia,
requires minimal land use, and is easily removed at the end of the
mine life. The ropeway will also move tailings from the processing
plant to the underground paste fill plant.
|
Reduced size
and
relocation of
tailings storage facility
|
The new PSN design
considers the use of process tailings as backfill in the
underground stopes, significantly reducing the surface tailings
storage capacity requirements and environmental
footprint.
|
Shortened
construction
period
|
The Feasibility Study
estimated a 3.5-year construction period, with the critical path
highly dependent on the TBM advance rate. The new PSN development
plan will not utilize a TBM, resulting in an accelerated
construction period.
|
Environmental
studies
|
The new, smaller-scale
development plan is expected to reduce the environmental impact of
PSN and is expected to remain
mostly within the Feasibility Study project footprint covered by
the existing environmental baseline studies and
datasets.
|
Páramo
proximity
|
PSN remains outside the
Santurbán páramo delimitation area.
|
Opportunity
for
Contract
Mining
Partners
(CMPs)
|
Aris Mining has a
successful partnership model with CMPs that combines the
traditional skills and local knowledge of artisanal and small-scale
miners with the technology, infrastructure, health/safety
standards, and access to capital of industrial miners.
Aris Mining intends to
incorporate processing solutions for CMPs into the design and
development of PSN, with the potential to formalize miners in the
Soto Norte region in addition to Calimineros, an existing partner
at PSN with about 160 miners. Aris Mining's CMP model eliminates
the use of mercury and illegal explosives by artisanal
miners, creating an ecosystem
that benefits CMPs, local communities, the Colombian government, the
environment, and Aris Mining.
|
_________________________
|
1
See "Technical Disclosure and Qualified Person" section
below for full disclosure of technical and scientific details.
|
Conference Call
Management will host a conference call on Thursday, May 23, 2024, at 9:00 am ET / 6:00 am
PT to discuss this transaction. The call will be webcast and
can be accessed at Aris Mining's website at www.aris-mining.com, or
at https://services.choruscall.ca/links/arismining202405.html.
Participants may gain expedited access to the conference call at
the following registration link. Upon registering, call in
details will be displayed on screen. Using these call details will
by-pass the operator and avoid the call queue. Registration will
remain open until the end of the live conference call.
Participants who prefer to dial-in and speak with a live
operator, can access the call by dialing:
- Toll-free North America:
1-844-763-8274
- International: 1-647-484-8814
After the call, an audio recording will be available via
telephone for 7 days, until end of day May
30th, 2024. The recording can be accessed by dialing:
- Toll-free in the US and Canada: 1-855-669-9658
- International: 1-604-674-8052 and using the access code:
0915#
A replay of the event will be archived at Aris Mining
Corporation – Investors – Events & Presentations
(www.aris-mining.com).
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, Colombia", dated March
21, 2022 with an effective date of January 1, 2021 (the Soto Norte Technical
Report). The Soto Norte Technical Report was prepared by
Ben Parsons, MSc, MAusIMM (CP),
Chris Bray, BEng, MAusIMM (CP), and
Dr John Willis PhD, BE (MET), MAusIMM (CP), and Dr Henri Sangam, Ph.D., P.Eng., each of whom is
independent of Aris Mining within the meaning of NI 43-101 and is a
"Qualified Person" as such term is defined in NI 43-101. The report
was also prepared by Robert
Anderson, P.Eng., a Qualified Person who is considered
non-independent of Aris Mining. The Soto Norte Technical Report is
available for download on Aris Mining's website at
www.aris-mining.com and on Aris Mining Holdings Corp's (Aris
Holdings) SEDAR+ profile at www.sedarplus.ca and in Aris Mining's
filings with the SEC at www.sec.gov. Aris Holdings is a subsidiary
of Aris Mining.
About Aris Mining
Aris Mining is a gold producer in the Americas, currently
operating two mines with expansions underway in Colombia. The Segovia Operations and the
Marmato Upper Mine produced 226,000 ounces of gold in 2023. Aris
Mining is targeting a production rate of 500,000 ounces of gold per
year in the second half of 2026, following a ramp-up period after
the Segovia mill expansion scheduled for completion in Q1 2025 and
the Marmato Lower Mine's first gold pour in late 2025. Aris Mining
also operates the Soto Norte joint venture, where environmental
licensing is advancing to develop a new underground gold, silver
and copper mine. In Guyana, Aris Mining is advancing Toroparu,
a gold/copper project. Aris Mining intends to pursue acquisitions
and other growth opportunities to unlock value through scale and
diversification.
Aris Mining promotes the formalization of artisanal and
small-scale mining 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
acquisition of additional joint venture interest in PSN and the
details and timing thereof, plans pertaining to PSN and the
details, costs, benefits and timing thereof, the PFS and the
expected timing thereof and the timing and details thereof and the
Company's plans and strategies are forward-looking. Generally, the
forward-looking information and forward looking statements can be
identified by the use of forward looking terminology such as
"plans", "expects" or "does not expect", "is expected", "budget",
"scheduled", "estimates", "forecasts", "intends", "anticipates" or
"does not anticipate", "will continue" or "believes", or variations
of such words and phrases or state that certain actions, events or
results "may", "could", "would", "might" or "will be taken",
"occur" or "be achieved". The material factors or assumptions used
to develop forward looking information or statements are disclosed
throughout this news release.
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