- Marks new era for the Soto Norte Gold project with Aris Gold
as operator
- Aris Gold acquiring 20% ownership interest with option to
increase to 50%
- Soto Norte hosts Indicated Mineral Resources of 8.5
Moz Au and Inferred Mineral
Resources of 3.6 Moz Au
- Soto Norte Feasibility Study1
demonstrates production of over 450,000 gold ounces per year at
average AISC of $471/oz from 5.0 Moz
Mineral Reserve
- Aris Gold will work hand-in-hand with the local communities
to ensure protection of the Soto Norte project's ecosystem
- Aris Gold on a path to attributable production exceeding
400,000 ounces per year at AISC of approximately $650/oz
All amounts in US dollars, unless otherwise indicated
VANCOUVER, BC, March 21, 2022 /CNW/ - Aris Gold
Corporation (Aris Gold or the Company) (TSX: ARIS) (OTCQX:
ALLXF) announces it has entered into a definitive agreement with
MDC Industry Holding Company LLC (Mubadala), a wholly owned
subsidiary of the Abu Dhabi based
investment company Mubadala Investment Company PJSC, whereby Aris
Gold will acquire a 20% joint venture interest in the Soto Norte
gold project in Colombia, with the
option to acquire a further 30% interest (the Transaction).
The Soto Norte gold project is one of the world's largest
feasibility-stage projects with high-grade mineral reserves, low
capital intensity, low operating costs, and district-scale
potential. Aris Gold has completed a Feasibility Study technical
report on the Soto Norte project, which has been privately held
since 2011, which provides a complete description of the
project.
Aris Gold has also strengthened its financial position by
$100 million by upsizing the existing
precious metals stream at the Marmato Mine by $65 million and arranging a $35 million convertible debenture.
Aris Gold will use its position as an established member of the
Colombian mining industry to ensure Soto Norte is advanced using
the highest international standards to create exceptional value for
its shareholders and workforce, the Colombian government, and
community partners, while implementing sustainable mining practices
that protect the environment and the local ecosystem. Aris Gold
operates the Marmato gold mine in the Department of Caldas, where a
major expansion is under way and a 30-year mine license extension
was received in February 2021 by
agreement with the Agencia Nacional de Mineria (ANM).
Aris Gold Chair Ian Telfer
stated: "Acquiring interests in large-scale deposits with low
technical risk is the right move for Aris Gold. This is how
successful gold mining companies are built, and I'm pleased to see
Aris Gold is delivering on this responsible growth strategy."
Executive Director, Industrials at Mubadala and Chairman of
Minesa, Danny Dweik, said: "We are
delighted to bring in Aris Gold as our operating partner in Minesa.
The Soto Norte project will benefit from their technical
capabilities and Colombian experience, and we look forward to
working with them and the local communities on bringing this
world-class project to fruition."
Aris Gold CEO Neil Woodyer
stated: "Aris Gold will build a successful operation using
state-of-the-art technology that will provide long-lasting benefits
to the local communities and significant social development
opportunities for the region. Soto Norte dramatically increases our
growth profile with its potential to produce over 450,000 ounces of
gold per year. Construction of Soto Norte is expected to follow the
expansion of our 100%-owned Marmato gold mine."
Director, Industrials at Mubadala and current CEO of Minesa,
Mohamed Mirza, said: "The team at
Aris Gold has extensive local market experience and a long track
record of successfully executing complex Colombian projects. We
believe they are well-positioned to support Minesa in becoming a
leading gold mining company in Colombia."
Soto Norte highlights
- Large, high-grade underground gold project:
-
- Indicated mineral resources of 48.1 million tonnes at 5.47
grams per tonne (g/t) of gold, 35.8 g/t of silver, and 0.18% Cu
containing 8.5 million ounces (Moz) of gold, 55.3 Moz of silver,
and 193 million pounds (Mlb) of copper, inclusive of mineral
reserves
- Inferred mineral resources of 27.3 million tonnes at 4.06 g/t
of gold, 25.9 g/t of silver, and 0.18% Cu containing 3.6 Moz of
gold, 22.8 Moz of silver, and 107 Mlb of copper
- The mineralized vein structures extend to surface and are open
at depth and along strike, with high exploration potential to
target the deep structures from underground drilling stations
- Tier 1 scale and economics: Soto Norte is designed
as an underground mine with 2.6 Mtpa processing capacity and an
estimated $1.2 billion initial
capital cost, including contingency and pre-production costs. The
Feasibility Study estimates:
-
- Average production of 450,000 ounces of gold per year
- Life of mine average all in sustaining costs of $471 per ounce of gold
- 14-year mine life, based on Probable mineral reserves of 24.8
million tonnes at 6.22 g/t of gold, 34.4 g/t of silver, and 0.18%
copper, containing 5.0 Moz of gold, 27.4 Moz of silver, and 107
Mlb of copper
- After-tax project NPV5% is $1.5 billion and IRR is 20.8%, at base case gold
price of $1,675 per ounce
- After-tax project NPV5% is $2.0 billion and IRR is 24.4%, at gold price of
$1,925 per ounce
- District-scale potential: The Soto Norte project is
hosted within an area of just over 10% of the mining titles held by
the joint venture along the mineralized La Baja fault trend that
hosts other mineralized deposits. The neighbouring Galway/Calvista
concession has a historical resource estimate prepared by SRK
Consulting, effective June 11, 2018,
of 2.3 million tonnes in the Indicated category at 4.6 g/t of gold
and 35 g/t of silver, containing 0.335 Moz of gold and 2.5 Moz of
silver.2
- New and informed approach to environmental permitting:
Since 2015, extensive technical studies and engagement with the
local communities were undertaken in preparing an initial
Environment and Social Impact Assessment (ESIA). Following detailed
technical feedback from the Colombian environmental regulatory
authority (ANLA) in 2021, drafting of a new ESIA commenced and will
include a robust Quality Assurance and Quality Control process for
regulatory compliance. As operator, Aris Gold's team will
contribute its knowledge and experience as well as provide a
respectful, licensing process with its local stakeholders.
The Soto Norte project has been designed to minimize the surface
footprint, incorporate the latest technology, and meet the highest
environmental and safety standards. The processing facility will
produce separate gold-rich copper and pyrite concentrates without
the use of cyanide or mercury at the Soto Norte site. Dried and
filtered tailings will be stored in a dry-stack tailings storage
facility designed to comply with Colombian and international
standards.
- Social development opportunities: Soto Norte will
be a significant project for the local and regional communities,
providing employment and skills training for up to 1,800
construction contractors and up to 940 full time operations
personnel, and a strategy to procure goods and services from the
regional community.
- Sets Aris Gold on a path to produce 400,000 ounces per
year: Together with the Marmato mine, which is expected to
produce 175,000 ounces of gold per year when both the Upper Mine
and Lower Mine are operating, the transaction will position Aris
Gold as a significant mid-tier gold producer in Colombia with aggregate attributable
production exceeding 400,000 ounces of gold per year at all-in
sustaining costs per ounce sold3 of approximately
$650 and generating significant cash
flows.
Soto Norte Joint Venture Transaction
On closing Aris Gold and Mubadala will enter into a
comprehensive joint venture agreement to govern the joint venture
company through which environmental licensing, project development
and construction, and mine operation of Soto Norte will be
undertaken. Aris Gold will be the project operator, and the joint
venture partners will share project costs on a pro-rata ownership
basis. Other highlights include:
- Cash payments of $100 million
from Aris Gold to Mubadala for a 20% interest in the joint venture
company and Minesa, with closing of the Transaction expected to
occur in April 2022 following
satisfaction of customary closing conditions. The cash payments are
structured in two tranches with $50
million at closing and $50
million within 12 months of closing.
- Aris Gold has the option to acquire an additional 30% interest
in the joint venture company and Minesa for a cash payment of
$300 million (the Option). Aris Gold
may exercise the Option at any time prior to the earlier of a) 10
weeks following receipt of the ESIA approval from ANLA for
development of the Soto Norte Project or b) 42 months after closing
(Option Expiry Date). The drafting, submission, and approval
process for a new ESIA is expected to take approximately two
years.
- In the event Aris Gold does not exercise the Option prior to
the Option Expiry Date, Mubadala may repurchase Aris Gold's 20%
interest in the joint venture company at a price equal to the
aggregate amount invested by Aris Gold up to that point (i.e., the
initial cash payments and paid cash calls).
- Following the start of commercial operations, the joint venture
partners intend to invest in long-term strategic exploration
programs designed to expand the current mineral resources, upgrade
mineral resource classification to support the conversion to
mineral reserves and extend the mine life.
- In consideration of the exploration potential at Soto Norte,
Mubadala is retaining a precious metals streaming interest on 7.35%
of payable gold and 100% of payable silver. The stream will only
apply to incremental production after the first 5.7 Moz gold have
been produced which is expected to be achieved following depletion
of the current mineral reserves and approximately 30% of the
current Indicated mineral resource. Following the 5.7 Moz gold
production threshold, Aris Gold's ownership in the joint venture
may be decreased based on a remaining life of mine valuation
formula that assigns a portion of the economic burden of the
precious metals streaming to Aris Gold's joint venture interest,
rather than Mubadala. Aris Gold has the option to avoid this future
potential ownership dilution by paying the stream burden valuation
amount to Mubadala.
- Aris Gold and Mubadala will advance the Soto Norte project with
consideration of the Equator Principles and the IFC's Performance
Standards.
Aris Gold Corporate Finance Update
In preparation for entering the Soto Norte joint venture, Aris
Gold has amended the existing $110
million precious metals stream at the Marmato mine with
Wheaton Precious Metals International (WPMI) to increase the
aggregate total funding amount to $175
million, with additional payments to Aris Gold of (i)
$15 million upon closing of the
Transaction and (ii) $50 million
payable during the construction and development of the new Lower
Mine.
In exchange for the increased upfront deposits, WPMI has agreed
to purchase 10.5% of the gold production and 100% of the silver
production from the Marmato Upper and Lower mines until 310,000
ounces of gold and 2.15 million ounces of silver have been
delivered, after which the stream drops to 5.25% of the gold
production and 50% of the silver production for the life of
mine.
Aris Gold has also arranged to issue, through its wholly owned
subsidiary Aris Gold Acquisition Corp., a $35 million convertible senior unsecured
debenture to GCM Mining Corp. (TSX:GCM) due 18 months from closing
of the Transaction (the Debenture). At any time after 12 months
from closing, the Debenture is convertible, in whole or in part,
into common shares of Aris Gold at a conversion price that will be
determined in the context of the market and rules of the TSX
following the issuance of this news release. The Debenture will pay
interest monthly with an annualized coupon of 7.5%. The issuance of
the Debenture is conditional upon closing of the Transaction and is
subject to the approval of the TSX. The ability of GCM to fully
execute its conversion rights under the Debenture will be subject
to disinterested Aris Gold shareholder approval at the next annual
meeting of shareholders.
Soto Norte Mineral Resources and Mineral Reserves
Table 1: Soto Norte Mineral Resources, inclusive of Mineral
Reserves, effective May 22,
20194
Classification
|
Tonnes
|
Grade
|
Contained
Metal
|
|
(kt)
|
Gold
(g/t)
|
Silver
(g/t)
|
Copper
(%)
|
Gold
(koz)
|
Silver
(koz)
|
Copper
(klb)
|
Indicated Mineral
Resources
|
48,062
|
5.47
|
35.8
|
0.18
|
8,454
|
55,324
|
193,422
|
Inferred Mineral
Resources
|
27,343
|
4.06
|
25.9
|
0.18
|
3,571
|
22,754
|
107,281
|
Notes:
|
1)
|
Mineral resources are
not mineral reserves and do not have demonstrated economic
viability.
|
2)
|
Indicated mineral
resources are presented inclusive of probable mineral
reserves.
|
3)
|
The mineral resource
estimate was prepared by Benjamin Parsons, MSc, MAusIMM (CP) of SRK
Consulting, who is a Qualified Person as defined by National
Instrument 43-101. Mr. Parsons has reviewed and verified the
drilling, sampling, assaying, and QAQC protocols and results, and
is of the opinion that the sample recovery, preparation, analyses,
and security protocols use for the mineral resource estimate are
reliable for that purpose.
|
4)
|
Totals may not add up
due to rounding.
|
5)
|
Mineral Resources are
reported above a cut-off value of $47 per tonne, which considers
metal price assumptions of $1,300 per ounce of gold, $18 per ounce
of silver, and $6,800 per tonne of copper, metallurgical recovery
assumptions of 92% for gold and silver and 76% for copper, marginal
mining costs, processing costs, general and administrative costs,
and other factors.
|
6)
|
Aside from the
requirements to amend and extend the Soto Norte 0095-68 mining
license and to prepare, submit, and receive approval of a new ESIA
from ANLA, there are no known legal, political, environmental, or
other risks that could materially affect the potential development
of the mineral resources and mineral reserves.
|
Table 2: Soto Norte Mineral Reserves, effective January 1, 20215
Classification
|
Tonnes
|
Grade
|
Contained
Metal
|
|
(kt)
|
Gold
(g/t)
|
Silver
(g/t)
|
Copper (%
)
|
Gold
(koz)
|
Silver
(koz)
|
Copper
(klb)
|
Probable Mineral
Reserves
|
24,767
|
6.22
|
34.4
|
0.19
|
4,950
|
27,386
|
102,868
|
Notes:
|
1)
|
The mineral reserve
estimate has been approved by Chris Bray, BEng, MAusIMM (CP) of SRK
Consulting, who is a Qualified Person as defined by National
Instrument 43-101.
|
2)
|
Totals may not add up
due to rounding.
|
3)
|
Mineral Reserves are
reported above a cut-off value of $120 per tonne, which was
selected based on a hill of value study to optimize value, and
which considers metal price assumptions of $1,300 per ounce of
gold, $18 per ounce of silver, and $7,000 per tonne of copper,
metallurgical recovery assumptions of 92.5% for gold, 92% for
silver, and 76% for copper, mining costs, processing costs, general
and administrative costs, and other factors.
|
4)
|
Aside from the
requirements to amend and extend the Soto Norte 0095-68 mining
license and to prepare, submit, and receive approval of a new ESIA
from ANLA, there are no known legal, political, environmental, or
other risks that could materially affect the potential development
of the mineral resources and mineral reserves.
|
Technical Information
Historical Resource Estimate
The historical resource estimate at Galway/Calvista has not been
verified by Aris Gold and was prepared by SRK Consulting, effective
June 11, 2018, prior to Aris Gold
acquiring an interest in Minesa. While SRK used industry standard
and reliable methods to estimate the mineral resources, categorized
the estimates in accordance with CIM definition standards, and
reported the resources above a NSR cut-off value of $47 per tonne to consider initial underground
mining costs, processing costs, and metallurgical recoveries of 92%
for gold and silver and 76% for copper, treatment and payability
terms, and metal price assumptions of $1,300 per ounce of gold, $18 per ounce of silver, and $5,000 per tonne of copper, the Qualified Person
has not done sufficient work to classify the historical estimate as
current mineral resources, nor is there a publicly disclosed
technical report to support the disclosure of the mineral
resources, and therefore Aris Gold is not treating the historical
estimate as current mineral resources.
Technical Information and Qualified Persons
The scientific disclosure and technical information included in
this news release is based on information included in the
Feasibility Study prepared by Ben Parsons MSc, MAusIMM (CP),
Chris Bray BEng, MAusIMM (CP), Dr
John Willis PhD, BE (MET), MAusIMM (CP), all of SRK Consulting, and
by Dr Henri Sangam PhD, P.Eng of SNC Lavalin, each of whom is
independent of the Company within the meaning of NI 43-101 and is a
Qualified Person as defined by NI 43-101. The Feasibility Study was
also prepared by Robert Anderson,
P.Eng., of Minesa, who is designated as a non-independent Qualified
Person within the meaning of NI 43-101 due to his extensive
involvement with the mineral process and geometallurgical testwork
and the consulting groups undertaking the process plant design.
The technical information in this news release was reviewed and
approved by Pamela De Mark, P.Geo,
Vice President Exploration of Aris Gold, who is a Qualified Person
as defined by NI 43-101.
BMO Capital Markets acted as M&A advisor to Mubadala
Investment Company.
About Aris Gold
Aris Gold is a Canadian mining company listed on the TSX under
the symbol ARIS and on the OTCQX under the symbol ALLXF. The
Company is led by an executive team with a demonstrated track
record of creating value through building globally relevant gold
mining companies. Aris Gold operates the Marmato mine in
Colombia, where a modernization
and expansion program is under way, and the Juby project, an
advanced exploration stage gold project in the Abitibi greenstone
belt of Ontario, Canada. Aris Gold
plans to pursue acquisition and other growth opportunities to
unlock value creation from scale and diversification.
Additional information on Aris Gold, including the Soto Norte
feasibility study, can be found at www.arisgold.com and
www.sedar.com.
_____________________________________
|
1
|
NI 43-101 Technical
Report Feasibility Study of the Soto Norte Gold Project, Santander,
Colombia with an effective date of January 1, 2021 prepared by SRK
Consulting (UK) Limited, SNC Lavalin, and Minesa (the Feasibility
Study). The Feasibility Study will be available on SEDAR under Aris
Gold's profile and on Aris Gold's website at
www.arisgold.com.
|
2
|
See Technical
Information – Historical Resource Estimate further in this news
release for details regarding the historical resource
estimate.
|
3
|
See "Non-IFRS
Measures" for full details on all-in sustaining costs per ounce
sold.
|
4
|
For full details on
the Soto Norte Mineral Resource Estimate, see the Feasibility
Study
|
5
|
For full details on
the Soto Norte Mineral Reserve Estimate, see the Feasibility
Study
|
Forward-looking Information
This news release contains "forward-looking information" or
"forward-looking statements" within the meaning of Canadian
securities legislation. All statements included herein, other than
statements of historical fact, including without limitation
statements relating to the Transaction; Minesa and its management;
the Soto Norte project; Aris Gold's relationship with local
communities and the protection of the Soto Norte project's
ecosystem; the Feasibility Study; the benefits of Aris Gold's
interest in and operatorship of the Soto Norte project; expected
production at Marmato and the Soto Norte project; Aris Gold's
position as a mid-tier gold producer in Columbia; all-in sustaining
costs; cash flows; the joint venture agreement and streaming
arrangements between Aris Gold and Mubadala; joint venture
strategy; compliance with the Equator Principles and the IFC's
Performance Standards; statements related to the potential of the
Soto Norte project; and Aris Gold's strategy are forward-looking.
Generally, the forward-looking information and forward- looking
statements can be identified by the use of forward looking
terminology such as "become", "believe", "estimate", "expect",
"forward", "intend", "plan", "potential" or variations of such
words and phrases or state that certain actions, events or results
"may", "could", "would", "might" or "will" be taken, "occur" or "be
achieved".
Forward looking information and forward looking statements,
while based on management's best estimates and assumptions, are
subject to known and unknown risks, uncertainties and other factors
that may cause the actual results, level of activity, performance
or achievements of Aris Gold to be materially different from those
expressed or implied by such forward-looking information or forward
looking statements, including but not limited to: the ability of
the Aris Gold management team to successfully integrate with the
current operations, successful completion of the ESIA and receipt
of approval from ANLA (including the Soto Norte 0095-68 mining
license amendment and extension from the ANM), receipt of
securities regulatory and stock exchange approvals, risks related
to international operations, risks related to general economic
conditions, uncertainties relating to operations during the
COVID-19 pandemic, actual results of current exploration
activities, availability of quality assets that will add scale,
diversification and complement Aris Gold's growth trajectory;
changes in project parameters as plans continue to be refined;
fluctuations in prices of metals including gold; the ability to
convert mineral resources to mineral reserves; fluctuations in
foreign currency exchange rates, increases in market prices of
mining consumables, risks associated with holding derivative
instruments (such as credit risks, market liquidity risk and
mark-to-market risk), possible variations in mineral reserves,
grade or recovery rates; failure of plant, equipment or processes
to operate as anticipated; changes in national and local government
legislation, taxation, controls, regulations, regulations and
political or economic developments in Canada or Colombia, accidents and operations, labour
disputes, title disputes, claims and limitations on insurance
coverage and other risks of the mining industry; delays in
obtaining governmental approvals including obtaining required
environmental and other licenses, or in the completion of
development or construction activities, changes in national and
local government regulation of mining operations, tax rules and
regulations, and political and economic developments in countries
in which the Company operates, as well as those factors discussed
in the section entitled "Risk Factors" in Aris Gold's most recent
AIF available on SEDAR at www.sedar.com.
Although Aris Gold has attempted to identify important factors
that could cause actual results to differ materially from those
contained in forward-looking information and forward-looking
statements, there may be other factors that cause results not to be
as anticipated, estimated or intended. There can be no assurance
that such information or statements will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such information or statements. The Company has and
continues to disclose in its Management's Discussion and Analysis
and other publicly filed documents, changes to material factors or
assumptions underlying the forward-looking information and
forward-looking statements and to the validity of the information,
in the period the changes occur. The forward-looking statements and
forward-looking information are made as of the date hereof and Aris
Gold disclaims any obligation to update any such factors or to
publicly announce the result of any revisions to any of the
forward-looking statements or forward-looking information contained
herein to reflect future results. Accordingly, readers should not
place undue reliance on forward-looking statements and
information.
Certain information contained in the news release includes
market and industry data that has been obtained from or is based
upon estimates derived from third party sources. Although the data
is believed to be reliable, Aris Gold has not independently
verified such information and cannot provide any assurance of its
accuracy, currency, reliability, or completeness.
Non-IFRS and Other Financial Measures and Ratios
Certain non-IFRS and other non-financial measures and ratios are
included in this press release, including all-in sustaining costs
per ounce sold. Please see Aris Gold's December 31, 2021 management's discussion and
analysis (MD&A) for explanations and discussion of non-IFRS and
other non-financial measures and ratios. The Company believes that
these measures and ratios, in addition to conventional measures and
ratios prepared in accordance with International Financial
Reporting Standards ("IFRS"), provide investors an improved ability
to evaluate the underlying performance of the Company. The non-IFRS
and other non-financial measures and ratios are intended to provide
additional information and should not be considered in isolation or
as a substitute for measures or ratios of performance prepared in
accordance with IFRS. These measures and ratios do not have any
standardized meaning prescribed under IFRS, and therefore may not
be comparable to other issuers. Certain additional disclosures for
these non-IFRS measures have been incorporated by reference and can
be found in the section 'Non-IFRS Measures ' in the December 31, 2021 MD&A available on SEDAR at
www.sedar.com and on the Company's website.
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SOURCE Aris Gold Corporation