Minera Alumbrera Secures Option to Acquire Agua Rica Copper Gold Project

Strategic Insights -

Minera Alumbrera, a joint venture company between Xstrata Copper, Goldcorp, and Yamana, has entered into a Letter of Intent (LOI) with Yamana to acquire the Agua Rica copper gold project in Argentina. The transaction, valued at up to US$110 million, will grant Minera Alumbrera an exclusive four-year option to acquire Yamana's 100% interest in the project. If exercised, the option will enable Minera Alumbrera to expand its operations and extend its current mine life by over 25 years.

Key Takeaways:

  • Minera Alumbrera has secured an exclusive four-year option to acquire the Agua Rica copper gold project in Argentina from Yamana Gold for up to US$110 million.
  • The Agua Rica deposit is located 35 kilometers southeast of Bajo de la Alumbrera copper and gold mine, operated by Minera Alumbrera.
  • Xstrata Copper and Goldcorp will finance all payments related to the option on a 57.14% and 42.86% basis respectively.
  • Minera Alumbrera will manage the Agua Rica project and fund the completion of a final feasibility study and all development costs.
  • Yamana would receive US$150 million and an additional US$50 million on commissioning, and 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 ounces.
  • Xstrata Copper Chief Executive, Charlie Sartain, stated that the option would enable Minera Alumbrera to further evaluate the potential of the Agua Rica project as part of its long-term growth strategy.

Statistics:

  • Up to US$110 million will be paid by Xstrata Copper and Goldcorp to Yamana for the Agua Rica project.
  • The Agua Rica project is located 35 kilometers southeast of Bajo de la Alumbrera copper and gold mine.
  • Xstrata Copper and Goldcorp will finance payments related to the option on a 57.14% and 42.86% basis respectively.
  • Yamana would receive US$150 million and US$50 million on commissioning.
  • 2.3 million ounces of gold production from Agua Rica.

Sources:

  • M2 COMMUNICATIONS RDATE:08032011
  • M2 PressWIRE-March 8, 2011
  • M2 Communications disclaims all liability for information provided within M2 PressWIRE.