Glencore International AG and Pan American Silver Corp have reached a definitive agreement for Glencore to acquire the 56.25% stake in the MARA project from Pan American Silver. The deal entails Glencore paying $475 million in cash upon closing and granting Pan American a copper Net Smelter Return (NSR) royalty of 0.75%.
The MARA project, situated in the Catamarca province of Argentina, boasts proven and probable mineral reserves of 5.4 million tons of copper and 7.4 million ounces of gold contained in 1.105 billion tonnes of ore. The project is supported by over 86 kilometers of drilling and has a projected mine life of 27 years based on these mineral reserves.
What sets the MARA project apart is its status as one of the world’s least capital-intensive copper projects, thanks to 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 has prior institutional knowledge of the asset and the jurisdiction due to its successful history of running the Alumbrera operations before the integration with Agua Rica.
Upon completion of the transaction, Glencore will emerge as the sole owner and operator of the MARA project, which is expected to become one of the top 25 global copper producers once operational. Over the first 10 full years, the project is predicted to exceed 200,000 tons per annum of copper production, complemented by additional material by-product credits.
The closing of the transaction is contingent on customary conditions and regulatory filings, with Glencore anticipating completion in Q3 2023.
Apart from the MARA project, Glencore’s other main copper play in Argentina is El Pachon, presently undergoing a full feasibility study. El Pachon is a copper and molybdenum project located in the province of San Juan, Argentina. It is 100% owned by Glencore and is expected to operate with a mine life of 25 years, producing approximately 350,000 tons of copper per annum.
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