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#Geoeconomics: Chinese company Zijin Mining acquires a major gold and copper mining project in Peru

By the third quarter of 2024, Zijin Mining will acquire the La Arena gold mine property and development rights for the La Arena II phase project

Canadian listed company Pan American Banking announced that it has reached an agreement with Jinteng Mining Private Limited, a subsidiary of Zijin Mining, to fully sell its wholly-owned subsidiary La Arena S.A.'s La Arena Gold Mine and La Arena II Phase II project in Peru. The total consideration for this transaction is approximately 2.1 billion yuan, including approximately 1.74 billion yuan in cash payments and approximately 360 million yuan in contingent payments.

La Arena gold mine in Peru. Image from Tahoe Resources

The La Arena mining area is located in the province of La Libertad, Peru, and consists of the La Arena gold mine and the La Arena II project. Since its acquisition of the mine from Tahoe Resources in 2019, Pan Am has discovered 16.6 tons of gold resources and has extended the mine's lifespan from 2021 to 2026, with the potential for further extension. Keywords: overseas engineering, international engineering construction, foreign engineering construction news.

According to the terms of the agreement, Zijin Mining will pay 1.74 billion yuan in cash to Pan American Banking upon completion of the transaction and receive a royalty fee of 1.5% of the net smelter income from the mining life gold of the La Arena II Phase II project. This arrangement means that Zijin Mining will make an additional contingent payment of up to 360 million yuan based on the actual performance of the La Arena II project after its commercial production begins.

The completion of this transaction requires meeting a series of customary conditions and obtaining approval from relevant regulatory authorities. Pan American Banking expects the entire transaction process to be successfully completed in the third quarter of 2024.

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