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April 18, 2024
PI Global Investments
Precious Metals

Wheaton Precious Metals announces the acquisition of a new silver stream on the Mineral Park Mine




 






Published by



Global Mining Review,

Wheaton Precious Metals Corp. has announced that its wholly-owned subsidiary, Wheaton Precious Metals International Ltd. (WPMI) has entered into a definitive Precious Metals Purchase Agreement (the Silver Stream) with Waterton Copper Corp., a subsidiary of Waterton Copper LP in respect to its 100% owned Mineral Park Mine located in Arizona, US.

“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 optimise the operation,” said Randy Smallwood, Wheaton’s President and Chief Executive Officer. “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.

“Waterton Copper is delighted to have Wheaton Precious Metals’ support,” added Isser Elishis, Executive Chairman of Waterton Copper. “Waterton is investing approximately US$600 million to optimise Mineral Park, including significant capital investments in new primary crushers, secondary and pebble crushing circuits, and new higher-power SAG mills, which are expected to result in decades of operational excellence.”

Transaction details:

  • Upfront Consideration: WPMI will pay Waterton Copper total upfront cash consideration of US$115 million in four payments during construction (three installments of US$25 million and a final installment of US$40 million).
  • Streamed Metal: Under the silver stream, WPMI 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%.
  • Production Profile: Attributable production is forecast to average over 0.69 Moz of silver per year for the first five years of production and over 0.74 Moz of silver per year for the life of mine, with construction to be completed by the end of 1Q25. Mineral Park is forecast to have a 12-year mine life, with the potential to expand the mine life to over 20 years.
  • Production Payments: WPMI 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.
  • Incremental Reserves and Resources: The addition of Mineral Park will increase Wheaton’s total estimated Proven and Probable Mineral silver reserves by 14.6 Moz, Measured and Indicated Mineral silver resources by 18.4 Moz and Inferred silver resources by 16.2 Moz.
  • Other considerations:
    • The silver stream will include a customary completion test.
    • WPMI will provide a secured debt facility of up to US$25 million once the full upfront consideration has been paid.
    • WPMI has also obtained a right of first refusal on any future precious metals streams, royalty, prepay or similar transactions.
    • Waterton Copper and Origin Mining Company, LLC (the direct owner of Mineral Park) will provide WPMI with corporate guarantees and certain other security over their assets.
    • Waterton Copper is expected to comply in all material respects with WPMI’s Partner/Supplier Code of Conduct, which outlines Wheaton’s expectations in regard to environmental, social, and governance (ESG) matters.



 

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