AngloGold Ashanti (NYSE: AU) has withdrawn from three early-stage projects in Argentina currently held by Canadian junior Latin Metals (TSXV: LMS), citing a shift in the group’s greenfield exploration strategy.
This week, AngloGold informed Latin Metals that it plans to terminate its option to acquire a majority interest in the Organullo, Ana Maria and Trigal properties, effective in three months.
The agreement, signed in June 2022, allowed AngloGold to acquire a 75% interest in the projects by making a cash payment of approximately $2.57 million and spending $10 million on exploration within five years. Upon fulfilling these obligations, the companies would form a joint venture. AngloGold also had the right to increase its JV ownership to 80% by delivering a resource estimate and making payments to Latin Metals linked to this gold resource.
To date, AngloGold has invested $3.3 million in exploration and permitting activities. At Organullo, site of a historic gold mine, it has defined multiple high-priority drill targets along a 6 km strike and also expanded the property through the acquisition of mineral rights.
Salares Norte comparison
The termination notice comes just a month after the announcement of a 6,000-metre drill program at Organullo to test the potential of the large-scale gold system. The AngloGold team had been targeting a multi-million-ounce, Tier 1 discovery, comparing the project to the Salares Norte mine owned by its peer Gold Fields (JSE: GFI), with a 3.4-million-ounce reserve grading 5.36 grams per tonne gold.
“From a technical standpoint, the drill targets at Organullo were considered a high priority for AngloGold, and the decision to withdraw from the Organullo agreement is a result of a recent change to AngloGold’s global greenfields exploration strategy,” Latin Metals CEO Keith Henderson said in a press release.
“Organullo remains a 100%-owned, fully drill-permitted, gold exploration project with multiple untested targets prospective for both high-sulphidation gold and porphyry copper-gold mineralization,” he said.
On Friday, Latin Metals held above the C$0.20-a-share price level, which it traded at over the past month, despite AngloGold’s withdrawal. Its market capitalization is approximately C$26.1 million ($18.6 million).
AngloGold Ashanti was also little-moved, trading at $68.86 apiece in New York and a market capitalization of $34.8 billion.