Expected significant economic benefits. Zijin Mining Group (601899.SH) plans to acquire 100% equity of Peru's La Arena gold mine and phase 2 project under Pan American Silver.

Zijin Mining Group (601899.SH) announced that, according to the equity acquisition agreement signed by the company and its overseas wholly-owned subsidiary Jin Tang (Singapore) Mining Co., Ltd. ("Jin Tang Mining") with Pan American Silver Corp. ("Pan American Silver") and its two subsidiaries Aquiline Resources Inc. and 0799714B.C.Ltd. (collectively referred to as the "transferor"), Jin Tang Mining intends to acquire 100% equity of La Arena S.A. ("target company") held by the transferor after penetration. The acquisition consideration includes 245 million US dollars (equivalent to approximately RMB 1.739 billion, calculated at an exchange rate of 7.0993 RMB to 1 US dollar announced by the China Foreign Exchange Trading Center on November 6, 2024), as well as 50 million US dollars in contingent payments after the commercial production of the phase II project and a 1.5% net smelting revenue of gold; at the same time, Pan American Silver has the right to choose to underwrite a portion of the cathode copper produced in the La Arena phase II production on general commercial terms. It is reported that the core asset of the target company is the La Arena project in Peru, in which it holds 100% equity rights. The La Arena project is divided into phase I and phase II. Phase I is a Gold Heap Leaching project in production, while phase II is a porphyry copper-gold project in the research stage. Phase I of the La Arena project is a Gold Heap Leaching project in production in the southwest, which began production in 2011, with a daily processing capacity of 36,000 tons, an annual gold production of approximately 3 tons, a remaining service life of 3 years, and the potential to extend the service life through the gold ores extracted in phase II. Phase II of the La Arena project will develop a porphyry copper-gold deposit in the northeast, which is currently in the research stage and requires further exploration and development plan verification. According to the preliminary assessment by the company's technical team, phase II of the La Arena project is planned to use open-pit mining and flotation processes, with a design scale of 33 million tons/year, a construction period of 3 years, a production period of 19 years, and an expected annual production of approximately 100,000 tons of copper and 3.8 tons of gold after reaching full production. The company believes that the La Arena project is located in a world-renowned mineralization zone, is a producing mine with large copper and gold resources, and has good potential for mineral exploration and resource increment. The infrastructure of the mine area is relatively complete, with a long service life for the mine, good local transportation and power supply conditions, and significant expected economic benefits. The La Arena project is located 360 kilometers away from the company's Baihe copper-molybdenum mine, with management synergies, and the development of the La Arena project will also help accelerate the start of the Baihe project.