On Tuesday, streaming company Wheaton Precious Metals (TSX: WPM) announced that it has entered into a definitive precious metals purchase agreement with Waterton Copper in respect to its 100% owned Mineral Park mine located in Arizona, USA.
According to the agreement, Wheaton will purchase 100% of the payable silver from the project for the life of the mine. Payable silver is calculated using a fixed payable factor of 90%.
The company said it will pay Waterton Copper total upfront cash consideration of $115 million (deposit) in four payments during construction (three installments of $25 million and a final installment of $40 million).
Attributable production is forecast to average over 0.69 million ounces of silver per year for the first five years of production and over 0.74 million ounces of silver per year for the life of mine, with construction to be completed by the end of Q1 2025, it added.
Wheaton noted it will make ongoing payments for the silver ounces delivered equal to 18% of the spot price of silver until the uncredited deposit is reduced to nil and 22% of the spot price of silver thereafter.
Mineral Park is forecast to have a 12-year mine life, with the potential to expand the mine life to over 20 years. Waterton is investing approximately $600 million to optimize Mineral Park.
President and CEO Randy Smallwood said, “Wheaton is excited to bring Mineral Park back into our portfolio given our long history with the mine, particularly given the work Waterton Copper has done to optimize the operation.
“Our unique understanding of Mineral Park, and its potential, positions us well to assist Waterton Copper in bringing the mine back into production in a sustainable manner. As global efforts to transition to a low-carbon economy accelerate, critical metals, such as copper, that are produced responsibly within politically stable jurisdictions, have never been more important.”
Wheaton Precious Metals is the world’s premier precious metals streaming company. The company indicated that its business model offers investors leverage to commodity prices and exploration upside but with a much lower risk profile than a traditional mining company.
Source: Kitco
