Canadian miner Yamana Gold has signed an agreement to sell all of its interest in the Gualcamayo gold mine located in the San Juan Province of Argentina to Colombia-based precious metals exploration firm Mineros for a consideration of around $85m.

Under the terms of the agreement, Mineros will provide $30m at the time of the closure of the sale, followed by a further $30m once commercial-scale production commences at the Deep Carbonates project.

Deep Carbonates is an undeveloped mineral resource situated below the existing oxide gold mineralisation at the Gualcamayo project.

Yamana will also retain a 2% net smelter return royalty (NSR) on metal production from the Gualcamayo project after the initial 396,000oz. The NSR is capped at $50m and does not include the Deep Carbonates project. Additionally, the company will have a 1.5%, uncapped NSR on the Deep Carbonates project.

Yamana has agreed to the deal as part of its strategy to focus on projects that showcase greater potential for production, costs, longer life and capital requirements.

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The completion of the sale, which is subject to customary regulatory and third party approvals, is anticipated to occur in the fourth quarter of this year.

In a separate transaction, Yamana agreed an option deal over La Pepa project, located in the Maricunga gold belt, Chile.

Pursuant to the deal, Mineros will have an option to buy up to a 51% interest in the La Pepa project. The company will have an earn-in period of four years, following which it can acquire the remaining 49% stake under a call option.

As per the terms of the option agreement, Mineros is required to invest $5m on the La Pepa project over a period of two years in return for an initial 20% interest.

“Mineros will provide $30m at the time of the closure of the sale, followed by a further $30m.”

The company can gain a further 31% interest by incurring an additional $15m over the subsequent two-year period towards completion of a National Instrument No. 43-101 compliant technical report for the project and making a $5m payment to Yamana.

Once the company’s stake in the project reaches 51%, it can exercise the call option to buy the remaining 49% interest.

The parties will sign the option agreement upon completion of the Gualcamayo transaction.