Aris Mining (TSX: ARIS) is substantially increasing its ownership in the Soto Norte gold-copper project in Colombia. The company has entered into a binding purchase agreement with Mubadala Investment Company, under which it will take a controlling stake in the joint venture.
The arrangement will see Aris acquire a 31% ownership interest in the project from Mubadala, thereby bringing its total interest in the project to 51%. The purchase comes at a price of roughly $89.3 million, with the transaction to be settled via the issuance of 15.75 million shares of Aris, resulting in Mubadala taking a 9.99% interest in the mine developer.
A further 6.0 million shares are to be issued upon receipt of an environmental license for Soto Norte. The total consideration for the project is pegged at $123.3 million based on current share pricing.
The acquisition will result in the development team of Soto Norte being integrated with Aris’ management structure. Aris has also indicated that it will focus on a new, smaller-scale development plan for the project, which will see a more efficient operation planned for Soto Norte. A smaller processing facility is to be constructed at the project than was previously planned, which is expected to result in a longer operating life, while a flexible mining plan is anticipated to target higher-grade material earlier in the mine life. A paste backfill plant is to also be constructed to reduce surface tailings storage requirements.
“As the only mining company with operational experience to own and operate Soto Norte, we believe a new, smaller-scale development plan with a reduced environmental footprint is the right path forward. Aris Mining also plans to incorporate processing solutions for contract mining partners into the design and development of Soto Norte. [..] Based on the attractive results of our preliminary work, we are initiating a Pre-Feasibility Study (PFS) of the new development plan, which is expected to be complete by early 2025,” commented Aris CEO Neil Woodyer.
The new processing plant is expected to have a 2,750 tonnes per day capacity, with the revised mining plan designed to sustain a mining rate of 2.0 million tonnes of mill feed and waste per year. The feasibility study currently in place called for a mining operation amounting to 7,200 tonnes per day, which was to result in annual production of 450,000 ounces over an 11 year mine life. A revised prefeasibility study is expected to be completed in the first quarter of 2025.
Aris Mining last traded at $5.67 on the TSX.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
