Canada Approves Pan American's Sale of Peru Mine to China's Zijin Mining

The Canadian government has officially approved Pan American Silver's sale of its La Arena mine and associated project in Peru to a subsidiary of China’s Zijin Mining Group. This approval, granted under the Investment Canada Act, includes a joint agreement requiring Pan American and Zijin to enter into an offtake arrangement for the La Arena II project. Under this agreement, Pan American will secure 60% of the future copper concentrate supply from the La Arena II project, targeting the North American market once commercial production begins.

With all regulatory approvals now in place, the transaction is expected to close by the end of the fourth quarter of 2024.

As per the terms of the sale agreement, Zijin will pay $245 million in cash upon the closing and grant Pan American a 1.5% gold net smelter return royalty for the life of the La Arena II project. Additionally, upon the start of commercial production from the project, Zijin will make an extra contingent cash payment of $50 million.

Pan American Silver, known for its silver and gold production across North and South America, operates mines in Canada, Mexico, Peru, Brazil, Bolivia, Chile, and Argentina. The company also holds ownership of the Escobal mine in Guatemala, which is currently not in operation.

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