trending Market Intelligence /marketintelligence/en/news-insights/trending/utlnLWwm9AlrGOkRH2fNBA2 content esgSubNav
In This List

Anglo American eyes Lumina Gold properties in Ecuador


Japan M&A By the Numbers: Q4 2023


Infographic: The Big Picture 2024 – Energy Transition Outlook

Case Study

An Oil and Gas Company's Roadmap for Strategic Insights in a Quickly Evolving Regulatory Landscape


Essential IR Insights Newsletter Fall - 2023

Anglo American eyes Lumina Gold properties in Ecuador

Anglo American PLC and Lumina Gold Corp. signed a letter of intent to negotiate a potential US$57 million joint venture covering Lumina Gold's Pegasus A and B concessions in Ecuador.

The companies aim to seal a definitive agreement in the next five months, Lumina Gold said in a March 26 press release.

Anglo American spokesperson James Wyatt-Tilby declined to comment on the company's interest in the properties. "But we are pretty active on the resource discovery front across a wide range of countries," he said in a March 26 email.

The letter of intent follows a similar agreement Lumina Gold made with First Quantum Minerals Ltd. covering two of its other properties in Ecuador. A Lumina Gold spokesperson said that proposal has not yet closed but is on track.

As for Anglo American's interest in the Pegasus A and B properties, the Lumina Gold spokesperson said the diversified miner would likely investigate anomalies previously identified on the concessions. "They're out there looking for large base metal porphyry systems."

Should the earn-in go ahead, he expects that, as a first step, Anglo American would fly airborne geophysics as it takes a regional scale view of the projects and then "zone in from there."

The letter of intent describes a multistage earn-in process between Lumina Gold and an Anglo American subsidiary.

For a 25% stake, Anglo American would need to spend US$10 million on exploration before the fourth anniversary of the joint venture agreement and pay US$2.4 million to Lumina Gold, including an upfront payment. To boost the stake to 51%, Anglo American would have to spend a further US$35 million before the sixth anniversary and pay Lumina Gold US$4.8 million before the fifth anniversary.

For a 60% interest, Anglo American would have to spend US$50 million on exploration by the seventh anniversary and also pay US$7.3 million to Lumina Gold by the sixth anniversary of the joint venture agreement. Anglo American could then earn another 10% interest if it funded all work up to a construction decision.

After that, the companies' share of expenditures would match their respective joint venture shareholding.