Aris Mining has entered a binding agreement with MDC Industry Holding (Mubadala) to acquire an additional 31% joint venture interest in the Soto Norte (PSN) gold-copper project in Colombia.
Soto Norte is claimed to be one of the largest undeveloped underground projects in South America and is set to employ modern and sustainable mining practices.
Upon completion of the transaction, Aris will issue 15.75 million common shares to Mubadala, which is a subsidiary of the Abu Dhabi-based Mubadala Investment Company.
The shares issued to Mubadala will be subject to a 12-month hold period, including statutory and contractual transfer restrictions.
An additional six million shares will be issued to Mubadala following the environmental licence approval for PSN, potentially raising Mubadala's stake to around 13% on Aris Mining’s issued and outstanding shares as of 31 March 2024.
The current market value of the 21.75 million shares to be issued is estimated at $90m.
Upon the transaction's closure, expected next month, Aris Mining will become the majority stakeholder in the project with a 51% interest while Mubadala will retain 49%.
The current option held by Aris Mining to acquire an additional 30% interest in PSN will be terminated and will continue to act as the project's operator.
As per the agreement, Aris Mining will also integrate the PSN development team into its management structure and will solely fund certain operating costs during the pre-licensing period.
Both companies have agreed to mutual right-of-first-offer rights concerning the joint venture.
Aris also completed optimisation studies for PSN, proposing a smaller, more efficient development plan that aims to reduce environmental impact, extend the processing plant's life, and adopt flexible mining methods.
Aris Mining CEO Neil Woodyer stated: “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, following the successful partnership model developed at our Segovia operations in Colombia. 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 completed by early 2025.
“In support of this plan, we are delighted to become the 51% controlling shareholder of the Soto Norte joint venture at closing, enabling Aris Mining to develop this very attractive project.”
