COPPER-GOLD: Lundin to pay $1B for Yamana’s Chapada mine in Brazil

[caption id="attachment_1003728073" align="aligncenter" width="484"] View of the Chapada mine in Brazil. (Image: Yamana Gold)[/caption] TORONTO – Yamana Gold has agreed to sell its Chapada copper-gold mine to Lundin Mining in a deal said to be worth over $1.0 billion (all figures are U.S. dollars). The mine is located in Brazil’s Goias state and owned 100% by Yamana. The agreement calls for Lundin to pay $800 million in cash when the deal closes in Q3 2019. Additional consideration of up to $125 million based on the price of gold, a $100-million payment contingent on the development of a pyrite circuit to optimize mill performance, and a 2.0% net smelter return royalty on the adjacent Suruca gold project. Since production began in 2007, Chapada is a traditional truck and shovel operation with three active pits. Since start-up, the mine has yielded 225 million tonnes of ore grading 0.38% copper and 0.33 g/t gold. The mill is a conventional crush, grind and flotation plant that treats sulphide ore. Output is a clean 24% to 25% copper concentrate with gold grades between 10 and 15 g/t and silver grades between 40 and 45 g/t. Copper and gold recoveries were improved in 2016 and 2017 thanks to optimization projects at the mill. Yamana has looked at increasing the throughput to 32 million t/y from 28 million t/y and relocating some plant infrastructure to allow mining the Sucura zone. Yamana says the Chapada mine produced 129.0 million lb. of copper and 121,003 oz. of gold in 2018. The Chapada deposit has proven reserves, proven stockpiles and probable reserves totalling 644.6 million tonnes grading 0.25% copper, 0.16 g/t gold for 1.7 million tonnes of copper and 3.5 million oz. of gold. The measured and indicated resource is 422.8 million tonnes at 0.22% copper and 0.14 g/t gold. The inferred material totals 156.1 million tonnes at 0.23% copper and 0.08 g/t gold. The Suruca zone will be a primary gold producer. There are 65.2 million tonnes grading 0.51 g/t gold for 1.1 million contained ounces in proven and probable reserves. The zone also contains 82.3 million measured and indicated tonnes at 0.48 g/t and 12.6 million inferred tonnes at 0.48 g/t gold. More details about the arrangement are available at either www.Yamana.com or www.LundinMining.com.