MMG Ltd has agreed the sale of its 90% interest in Lane Xang Minerals (LXML), which owns the Sepon mine in Lao PDR, to Chifeng Jilong Gold Mining Co Ltd (Chifeng), for $275 million. Sepon’s current copper operation has a projected mine life to around 2020; however, the mine life has the potential to be extended as a primary gold operation. Accordingly, MMG initiated a strategic process in relation to its interest in Sepon in October 2017, with a view to transferring the mine to a gold focussed company better suited to realising Sepon’s future as a primary gold operation.

MMG CEO Jerry Jiao said that the agreement is a positive outcome for all stakeholders, including LXML Sepon employees, the government of the Lao PDR, and the local communities and businesses in the region.

“MMG is pleased to be able to transfer our interest in LXML to Chifeng – they are an experienced gold miner who is well suited and focussed on extending the life of Sepon through the transition from copper production to primary gold operations.  We look forward to supporting them through a smooth ownership transition and watching with interest as they develop the next phase in the life of this great mine,” Jiao said. “We are very proud of Sepon’s achievements and we are confident that Chifeng will continue the strong history of economic and social development that this operation has provided in Laos.”

LXML Sepon produced its first oxide gold in 2003, commencing large scale copper operations in 2005 and to date has produced over 900,000 t of copper and over 1.2 Moz of gold.

Chifeng Jilong Gold Mining Co is a Shanghai-listed precious metals producer headquartered in Chifeng, Inner Mongolia. It is a leading gold producer in China, with three core mining operations along with a mineral resources recycling business which produces a variety of precious metals from low grade precious metals and electronic device recycling.

Sepon is an open-pit copper mine in the Savannakhet Province, southern Laos. Sepon produces 99.9% copper cathode using a whole-of-ore leach, SX-EW process. The operation’s copper cathode is registered as Copper – Grade A quality by the London Metal Exchange (LME). Hence, Sepon copper is eligible for delivery to LME-approved warehouses. Copper cathodes are transported via road and sea to manufacturers of cable, wire and tube in Asia and Europe.

In 2017 Sepon produced 62,941 t of copper cathode. MMG expects to produce 70,000 to 80,000 t of copper cathode at Sepon in 2018.

The Sepon gold project yielded its first gold and silver doré in December 2002. In early 2005, an expansion of the original gold processing facility was completed, doubling the capacity of the gold processing plant to 2.5 Mt/y of ore.

During its operations, the Sepon gold operation produced over 1.2 Moz of gold through open pit mining and conventional treatment of oxide gold ore. MMG ceased gold operations in December 2013 due to depleting ore reserves and lower margins. The gold plant was placed on care and maintenance.

MMG engaged Standard Chartered Bank as its financial advisor and Linklaters as its legal counsel on the transaction.

Completion of the transaction is expected in the second half of 2018.