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Zijin Mining Group subsidiary to purchase La Arena in Peru for US$245 million cash upfront and US$50 million contingent payment
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On May 1, 2024, Pan American Silver Corp. (NYSE: PAAS) (TSX: PAAS) ("Pan American") announced that it had agreed to sell its 100% interest in La Arena S.A. ("La Arena"), which owns the La Arena gold mine as well as the La Arena II project in Peru, to Jinteng (Singapore) Mining Pte. Ltd., a subsidiary of Zijin Mining Group Co., Ltd. (collectively, "Zijin") for US$245 million cash upfront and a US$50 million contingent payment.
Under the terms of the agreement, at closing Zijin will pay US$245 million in cash and will grant Pan American a life-of-mine gold net smelter return royalty of 1.5% for the La Arena II project. Upon commencement of commercial production from the La Arena II project, the agreement provides for an additional contingent payment from Zijin of US$50 million in cash. The closing of the transaction is subject to customary conditions and receipt of regulatory approvals. Pan American expects the transaction to be completed in the third quarter of 2024.
Gowling WLG is advising Zijin with respect to this proposed purchase with a team comprised of France Tenaille and Brett Kagetsu (co-leads), Faran Umar-Khitab, Erik Goldsilver, Ethan Chang, Ian Macdonald, Elad Gafni, Paul Carenza and David Woodfield.
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