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.
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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.
