Since acquiring the mine from Tahoe Resources in 2019, Pan American said it has added 535,521 ounces of gold through exploration, and extended the mine life from 2021 to 2026, with the potential for further extension.
Under the terms of the deal, Zijin will grant Pan American a life-of-mine gold net smelter return royalty of 1.5% for the La Arena II project.
“With the sale of La Arena, we continue to deliver on our strategy to optimize our portfolio, following the Yamana transaction, while maintaining future upside through the retention of royalties,” Pan American CEO Michael Steinmann said in a news release.
“Proceeds from the transaction will further strengthen our financial position and allow us to deliver on our capital allocation priorities of investing in high-quality assets, debt reduction and returning capital to our shareholders.”
By market close Wednesday, Pan American Silver shares had advanced 0.70% on the NYSE. The company has a $6.8 billion market capitalization.