Chinese company buys gold and copper project in Argentina from Australian company

Australian company Power Minerals reported a binding agreement with China’s Fuyang Mingjin New Energy Development Co, Ltd (Mingjin) for the sale of its Santa Inés Copper-Gold Project in the province of Salta, Argentina.

According to the Australian company, “the sale of the Santa Inés Project is consistent with Power Minerals’ focus on becoming a leading developer of lithium projects in Argentina.”

The total cash consideration of $1.5 million to Mingjin follows his recent strategic investment of $2.6 million in Power. The combined proceeds of $4.1 million will be used in the ongoing development of Power’s Argentine lithium assets.

As of early May, Power and Mingjin had entered into a binding Agreement under which Mingjin will invest $2.6 million (before costs) in Power through a Placing of 6.5 million Power Common Shares at a price issue of $0.40 per share (Placement).

Upon completion of the placement, Mingjin will hold an 8.9% stake in Power’s issued share capital. Mingjin is an institutional investor in the lithium sector, with equity investments in other ASX-listed companies Octava Minerals Limited (ASX: OCT) and Patagonia Lithium Limited (ASX: PL3).

The Santa Inés copper-gold project consists of four mining leases covering 61.4 km2 held by Power Minerals SA. The project is located in the same geological structure and environment as BHP’s world-class Escondida copper-gold mine in Chile, 80 kilometers to the northwest, and represents a potential large-scale porphyry copper-gold opportunity. About 40 km to the northeast is First Quantum’s Taca Taca advanced exploration project (Figure 11) and three other major copper-gold projects, including Lindero, which began production in October 2020.

This is how Power Minerals reported the transaction:

Diversified minerals company Power Minerals Limited (ASX: PNN) (Power or the Company) is pleased to announce that it has executed a binding purchase and sale agreement (Agreement) for the sale of its 100%-owned Santa Inés Copper-Gold Project his property, in the Province of Salta in Argentina (Santa Inés) for a consideration in cash of 1.5 million Australian dollars.

The divestment of the non-core Santa Inés project is consistent with Power’s commitment to become one of the leading developers of lithium projects in Argentina. Proceeds from the sale will be used in Power’s ongoing accelerated development plans for its Salta Lithium Project. Mingjin has completed its due diligence process and under the terms of the Agreement will pay Power A$1.5 million to acquire 100% of the Santa Inés Project within the next 90 days.

“We are delighted to further enhance our relationship with Mingjin with the sale of our Santa Inés Project, following their recent strategic investment in Power. We plan to use the combined proceeds from the sale of the project and the investment, of $4.1 million, to continue the accelerated development of our lithium assets in Argentina.”

Power Minerals Managing Director Mena Habib Richlink Capital Group and Lynx Advisors Pty Ltd acted as advisors in the sale of the Project, and will receive a total commission of 6% upon completion of the Agreement.

Collaborator in ReporteAsia.