Xstrata Copper, Goldcorp and Yamana Gold announced in early September 2011 they have reached a definitive agreement providing Mineral Alumbrera the exclusive option to acquire Yamana’s 100% interest in the feasibility-stage Agua Rica copper-gold project. Minera Alumbrera is a joint venture between Xstrata Copper (manager and 50% owner), Goldcorp (37.5% owner), and Yamana (12.5% owner) that operates the Alumbrera mine in Catamarca province, Argentina. The Agua Rica project is located 35 km from the Alumbrera mine.
Under the terms of the agreement, Minera Alumbrera holds an exclusive four-year option to acquire Yamana’s interest in the Agua Rica project for cumulative payments made by Goldcorp and Xstrata Copper of $110 million. During the option period, Minera Alumbrera will manage the Agua Rica project and fund a feasibility study and all development costs. The respective ownership interests in Minera Alumbrera will remain unchanged and will apply to the Agua Rica project.
Minera Alumbrera can elect to exercise the option at any time during the four-year period. In addition to the option payments, Yamana would receive $150 million upon approval to proceed with construction and a further $50 million on start of commercial production. Yamana would also retain the right to a deferred payment related to 65% of the payable gold production from Agua Rica to a maximum of 2.3 million oz.
An independent Agua Rica project feasibility study has commenced under the direction of Xstrata Copper. Fluor Canada has been retained to conduct the study, which is expected to be complete in early 2013. Subject to a positive feasibility study, the option being exercised, and all necessary corporate and government approvals, a construction decision is expected to follow, with construction potentially starting in 2013.
The feasibility study will determine the optimum Agua Rica production profile. Minera Alumbrera’s analysis to date indicates the project has the potential to produce about 250,000 mt/y of copper and 140,000 oz/y of gold during the first five years of production and an average of 150,000 mt/y of copper and 130,000 oz/y of gold, along with associated molybdenum, over a 26-year mine life.
