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Glencore to Acquire Newmont’s 18.75% Shareholding in the Mara Project

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Glencore to Acquire Newmont’s 18.75% Shareholding in the Mara Project

 

 

 

 

 

Today Glencore International AG announced, and has made Yamana Gold Inc. (TSX:YRI) (NYSE:AUY) (LSE:AUY) aware under the terms of the MARA joint venture that it has reached an agreement to acquire Newmont Corporation’s 18.75% shareholding in the MARA Project. Following completion of the Agreement, Yamana remains the MARA JV operator with a 56.25% interest in MARA, with Glencore owning the remaining 43.75%. Yamana welcomes Glencore’s increased stake in the Project and believes the Agreement is a positive step for MARA, as the consolidation of ownership amongst partners provides a further endorsement of the quality and strategic optionality inherent in the Project, as well as underpinning its value.

 

Under the terms of the Agreement, Glencore will pay Newmont $124.9 million upon closing and a $30 million deferred payment upon commercial production subject to an annual interest charge of 6%. Total deferred consideration is capped at $50 million. Based on the NPV(8%) of $1.9 billion as determined by the 2020 PFS-B results summarized below, the implied P/NAV transaction multiple is approximately 0.5x which Yamana believes is in line with comparable precedent transactions for the sale of a minority interest in projects at similar stage of development.

 

Glencore previously operated Minera Alumbrera, in which Yamana was a partner. Currently Minera Alumbrera is part of the MARA Project after its integration with Minera Agua Rica, which Yamana wholly owned. Glencore has worked with Yamana in the formation of the MARA JV, the integration of the processing plant, related infrastructure and other assets of Minera Alumbrera with the Agua Rica deposit, and the advancement of the Project since then.

 

Yamana looks forward to continuing its work with Glencore and the local stakeholders as MARA advances its permitting, engineering, social licensing and field work towards the goal of finalizing the feasibility study and the environmental and social impact assessment, which the Company expects will further increase the Project’s value.

 

About MARA

 

The MARA project is high-quality, low-risk brownfield project located in the Catamarca province of Argentina. On a 100% basis, MARA has Proven and Probable Mineral Reserves of 11.8 billion pounds of copper and 7.4 million ounces of gold contained in 1.1 billion tonnes of ore(1). Based on the results of the PFS(B) completed in 2020, the project highlights include:

  • Initial long mine life of 28 years
  • Annual ore feed of 42 million tonnes per year
  • Annual production for the first 10 full years of 556 million pounds of copper equivalent production(2)
  • Cash costs(3) of $1.32 per pound and AISC(3) of $1.44 per pound for the first 10 years of production
  • Initial capital of $2.78 billion
  • NPV of $1.906 billion and an IRR of 21.2% assuming metal prices of $3.00 per pound of copper, $1,300 per ounce of gold price, $18.00 per ounce of silver, $11.00 per pound of molybdenum and using an 8% discount rate
  • The project economics increase to an NPV of greater than $3 billion and an IRR of approximately 30% assuming $3.50 per pound of copper and $1,600 per ounce of gold

 

Additional Project information can be found on the MARA project webpage.

 

Qualified Persons

 

Scientific and technical information contained in this news release has been reviewed and approved by Sébastien Bernier (P. Geo and Senior Director, Reserves and Resources). Sébastien Bernier is an employee of Yamana Gold Inc. and a “Qualified Person” as defined by Canadian Securities Administrators’ National Instrument 43-101 – Standards of Disclosure for Mineral Projects.

 

About Yamana

 

Yamana Gold Inc. is a Canadian-based precious metals producer with significant gold and silver production, development stage properties, exploration properties, and land positions throughout the Americas, including Canada, Brazil, Chile and Argentina. Yamana plans to continue to build on this base through expansion and optimization initiatives at existing operating mines, development of new mines, the advancement of its exploration properties and, at times, by targeting other consolidation opportunities with a primary focus in the Americas.

 

Posted September 23, 2022

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