Pan American Silver Corp. will sell its 56.25% stake in the MARA Project in Argentina to Glencore International AG, making Glencore the project’s sole owner. Under the terms of the agreement, Glencore will pay $475 million in cash upon closing and grant Pan American a copper Net Smelter Return (NSR) royalty of 0.75%.

The MARA project was first formed through the integration of the Minera Alumbrera plant and mining infrastructure and Agua Rica project in a joint venture between Yamana Gold, Glencore and Newmont in December 2020. Glencore acquired Newmont’s 18.75% stake in October 2022, bringing its shareholding to 43.75%. Pan American acquired Yamana Gold’s 56.25% stake as part of its acquisition of Yamana Gold in March 2023.

Located in the Catamarca province of Argentina, the MARA project has proven and probable mineral reserves of 5.4 million metric tons (mt) of copper and 7.4 million oz of gold contained in 1.105 billion mt of ore.

The brownfield MARA project ranks as one of the lowest capital-intensive copper projects in the world today, mostly due to the well-maintained Alumbrera processing plant and associated infrastructure. MARA is expected to be in the top 25 global copper producers when operational, with an expected average copper production over the first 10 full years exceeding 200,000 mt/y including byproduct credits.

Glencore has extensive institutional knowledge of the asset and the jurisdiction, based on its successful history of running the Alumbrera operations prior to the integration with Agua Rica in 2020.

The closing of the transaction is subject to customary conditions and regulatory filings. Glencore expects the transaction to be completed in Q3 2023.