BRUSSELS – Belgium's Nyrstar, the world's largest zinc producer, has sold an option to buy its mothballed Peruvian mine in Coricancha to Canada's Great Panther Silver.
Great Panther will pay $1.5-million for its option, with the possibility of extending it for another year for the same amount, Nyrstar said on Tuesday.
To keep the option, Great Panther also agreed to invest $2-million in the first of exploration operations at the mine and $3-million in the second year.
The Canadian group has the right to buy the mine for $5-million at any time during the option period.
Nyrstar bought a majority stake in the mine from Gold Hawk Resources for $15 million in 2009, fully acquiring it a year later for an additional payment of $4.4-million.
The Belgian company's foray into mining, which it began in 2009 to expand its access to raw materials, has been hampered by operational difficulties at its mines. Mining accounted for almost half of core profit in 2012 but contributed about a quarter last year.
The Coricancha mine has been shut since 2013 but still has reserves of gold, silver, zinc, lead and copper.
At the time of the initial acquisition, Nyrstar said it had also secured loans of $20-million to restart operations and had assumed a debt guarantee of $13-million.