VANCOUVER, Canada, September 8 /PRNewswire-FirstCall/ -- - Also
Acquires Current Silver Production From Three Additional Barrick
Mines, Providing Immediate Cash Flow Silver Wheaton Corp. ("Silver
Wheaton" or the "Company") (TSX, NYSE:SLW) is pleased to announce
that it has agreed to acquire from Barrick Gold Corporation
("Barrick") 25% of the life of mine silver production from its
Pascua-Lama project, as well as 100% of the silver production from
its Lagunas Norte, Pierina and Veladero mines until the end of
2013. Silver Wheaton will pay Barrick total cash consideration of
US$625 million over three years, as well as ongoing payments of the
lesser of US$3.90 (subject to an annual inflation adjustment) and
the prevailing market price, for each ounce of silver delivered
under the agreement. Transaction Highlights - Provides Immediate
Cash Flow - Silver Wheaton will receive 100% of the silver
production from three of Barrick's currently producing mines,
effective September 1, 2009, until the end of 2013; - This
immediately enhances Silver Wheaton's production and cash flow
profile, by adding average annualized silver production of
approximately 2.4 million ounces until Pascua-Lama commences
production. - Significantly Increases Long Term Growth Profile -
Silver Wheaton will receive 25% of the life of mine silver
production from Barrick's Pascua-Lama project, expected to be one
of the largest and lowest cost gold mines in the world; -
Pascua-Lama is a key Barrick growth asset and is the third largest
silver deposit in the world, with an estimated mine life of over 25
years; - Silver Wheaton's 25% share of the estimated average annual
silver production for the first five years (2013 to 2017) is 9
million ounces, boosting overall silver sales by 30% to
approximately 40 million ounces per annum; - Barrick has provided a
completion guarantee, requiring them to complete Pascua-Lama to at
least 75% of design capacity by December 31, 2015. If Barrick does
not meet completion by December 31, 2013, Silver Wheaton will
continue to receive silver production in 2014 and 2015 from the
currently producing mines, until Barrick satisfies the requirements
of the completion guarantee. "This is a transformational
acquisition that propels Silver Wheaton to the next level in terms
of size and growth profile," said Peter Barnes, President and Chief
Executive Officer of Silver Wheaton. "We are extremely excited to
be partnering with Barrick, the world's largest gold mining
company, on what is expected to be one of the biggest and lowest
cost gold mines in the world. Coupled with our interest in
Goldcorp's world-class Penasquito mine in Mexico, which is
currently ramping up production on schedule, Silver Wheaton now has
a significant stake in three of the top five silver deposits in the
world, of which Penasquito and Pascua-Lama are cornerstone growth
assets not just for Silver Wheaton, but also for our operating
partners." "This acquisition confirms Silver Wheaton as the largest
of all royalty and metals streaming companies in the world, with an
unparalleled growth profile. It is very accretive on all key
metrics, increasing attributable silver reserves by 43% and cash
flow by 35%, once Pascua-Lama is in production. The acquisition is
structured so that Silver Wheaton receives immediate cash flow,
even prior to Pascua-Lama being in production, maintaining our
strong balance sheet and preserving our ability to continue growing
the Company in an accretive manner for shareholders." "We are very
proud that, since we created this business model just five years
ago, we have demonstrated an unrivalled record of high quality
acquisitions, and now have a significant stake in nine of the top
35 silver deposits in the world." Transaction Terms To acquire 25%
of the life of mine silver production from Barrick's Pascua-Lama
project, as well as 100% of the silver production from its Lagunas
Norte, Pierina and Veladero mines until the end of 2013, Silver
Wheaton will make total upfront cash payments of US$625 million
over three years, of which US$212.5 million is payable on closing
and three further payments of US$137.5 million are due on the
first, second and third anniversaries. Silver Wheaton will also
make ongoing payments of the lesser of US$3.90 (subject to a one
percent annual adjustment starting in the fourth year after the
achievement of specific operating targets) and the prevailing
market price, for each ounce of silver delivered under the
agreement. Silver Wheaton will not share in any ongoing capital or
exploration expenditures at the various mines. Barrick has provided
Silver Wheaton with a completion guarantee, requiring them to
complete Pascua-Lama to at least 75% of design capacity by December
31, 2015. During 2014 and 2015, Silver Wheaton will be entitled to
the silver production from the currently producing mines to the
extent of any production shortfall at Pascua-Lama, until Barrick
satisfies the completion guarantee. If Barrick fails to satisfy the
requirements of the completion guarantee, the agreement may be
terminated by Silver Wheaton. In such an event, Silver Wheaton
would be entitled to the return of the upfront cash consideration
of US$625 million less a credit for silver delivered up to the date
of that event. Barrick has granted Silver Wheaton a five year right
of first refusal on any further metal stream sales in connection
with Pascua-Lama, where more than 50% of the value is from silver.
The transaction is expected to close September 22, 2009. Silver
Wheaton's financial advisor is Genuity Capital Markets and its
legal counsel is Cassels Brock & Blackwell LLP. Financing the
acquisition To pay the initial upfront cash payment of US$212.5
million, Silver Wheaton intends to use cash on hand (US$70 million)
and for the balance may use amounts borrowed under its revolving
credit facility or the proceeds of offerings of securities issued
in the public and/or private equity capital markets. Remaining
upfront cash payments of US$137.5 million per annum, for the next
three years, are expected to be financed by operating cash flows
with no debt drawdown anticipated. About Pascua-Lama Pascua-Lama
straddles the border of Chile and Argentina and is one of the
largest silver deposits in the world. It hosts 718 million ounces
of silver in proven and probable reserves, with additional measured
and indicated silver resources of 88 million ounces. As reported in
a Barrick press release dated May 7, 2009, expected average annual
silver production in the first full five years is approximately 35
million ounces. Anticipated total cash costs over this period are
US$20-$50 per ounce of gold which would make Pascua-Lama one of the
lowest cost gold mines in the world. Pascua-Lama is a long-life
asset with an expected mine life in excess of 25 years. Key
construction permits and environmental approvals have been received
and construction is underway. Commissioning of the mine is expected
in late 2012 with production commencing in early 2013. A
Transformational Year - 2009 Year-to-Date Highlights - Acquired
Silverstone Resources Corp., solidifying our position as the
largest silver streaming company in the world. - Acquired 100% of
the silver production from Barrick's currently producing Lagunas
Norte, Pierina and Veladero mines until the end of 2013, providing
immediate cash flow, and 25% of the life of mine silver production
from Barrick's Pascua-Lama project, adding significant long term
growth and another cornerstone asset to Silver Wheaton's silver
stream portfolio. - The Penasquito mine, soon to be one of the
world's largest open pitmines and another one of Silver Wheaton's
cornerstone assets, is currently ramping up production on schedule.
Silver Wheaton receives 25% of the life of mine silver production
from Penasquito, which is expected to be the Company's main driver
of growth for the next several years. - As a result of the Barrick
and Silverstone acquisitions this year: - 2010-2012 average annual
silver equivalent sales are forecast to increase by 26%, from
approximately 25 to 31 million ounces, while 2013-2017 average
annual silver equivalent sales are forecast to increase by 50%,
from approximately 26 to 40 million ounces; - Attributable silver
reserves have doubled while attributable measured and indicated
silver resources have increased by greater than 50%. - Silver
Wheaton is the largest and fastest growing of all of the royalty
and metals streaming companies in the world: - Unparalleled growth
profile versus its peers with greater than250% five year sales
growth forecast from 2008 levels; - Significant stake in three of
the top five silver deposits in the world and in nine of the top
35. - Significant debt reduction resulting in a very strong
Financial position: - Long term debt has been reduced by
approximately US$235 million and the Company continues to have
access to a US$400 million undrawn revolving credit facility. -
Well positioned to pursue additional accretive acquisitions.
Conference Call A conference call will be held on Tuesday,
September 8, 2009, starting at 12:00 pm (Eastern Time) to discuss
this transaction. To participate in the live call use one of the
following methods: Dial toll free from Canada or the US:
+1-888-231-8191 Dial from outside Canada or the US: +1-647-427-7450
Pass code: 29363920 Live audio webcast:http://www.silverwheaton.com
Participants should dial in five to ten minutes before the call.
The conference call will be recorded and you can listen to an
archive of the call by one of the following methods: Dial toll free
from Canada or the US: +1-800-642-1687 Dial from outside Canada or
the US: +1-706-645-9291 Pass code: 29363920 Archived audio
webcast:http://www.silverwheaton.com About Silver Wheaton Silver
Wheaton is the largest silver streaming company in the world.
Including the Barrick transaction, forecast 2009 sales are 16 to 18
million ounces of silver and 17,000 ounces of gold, for total sales
of 17 to 19 million silver equivalent ounces, growing to
approximately 39 million ounces of silver and 20,000 ounces of
gold, for total sales of approximately 40 million silver equivalent
ounces, by 2013. Silver Wheaton's updated attributable silver
reserves and resources can be found at:
http://files.newswire.ca/819/AttributabletoSLW.pdf Mr. Randy V.J.
Smallwood, P.Eng., Silver Wheaton's Executive Vice President of
Corporate Development, who is a "qualified person" as such term is
defined under National Instrument 43-101, has reviewed and approved
the information on mineral reserves and mineral resources disclosed
in this news release. Cautionary Note Regarding Forward
Looking-Statements The information contained herein contains
"forward-looking statements" within the meaning of the United
States Private Securities Litigation Reform Act of 1995 and
applicable Canadian securities legislation. Forward-looking
statements include, but are not limited to, statements with respect
to the future price of silver, the estimation of mineral reserves
and resources, the realization of mineral reserve estimates, the
timing and amount of estimated future production, costs of
production, reserve determination and reserve conversion rates.
Generally, these forward-looking statements can be identified by
the use of forward-looking terminology such as "plans", "expects"
or "does not expect", "is expected", "budget", "scheduled",
"estimates", "forecasts", "intends", "anticipates" or "does not
anticipate", or "believes", or variations of such words and phrases
or statements that certain actions, events or results "may",
"could", "would", "might" or "will be taken", "occur" or "be
achieved". Forward-looking statements are subject to known and
unknown risks, uncertainties and other factors that may cause the
actual results, level of activity, performance or achievements of
Silver Wheaton to be materially different from those expressed or
implied by such forward-looking statements, including but not
limited to: fluctuations in the price of silver, the absence of
control over mining operations from which Silver Wheaton purchases
silver and risks related to these mining operations, including
risks related to fluctuations in the price of the primary
commodities mined at such operations, changes in laws and
regulations including taxation policies, actual results of mining
and exploration activities, changes in project parameters as plans
continue to be refined, timing of funding the upfront cash
payments, both the initial payment and the following three annual
payments payable to Barrick in connection with the silver purchase
agreement, and completion of construction of the Pascua-Lama
project, as well as those factors discussed in the section entitled
"Description of the Business - Risk Factors" in Silver Wheaton's
Annual Information Form available on SEDAR at http://www.sedar.com/
and in Silver Wheaton's Form 40-F on file with the U.S. Securities
and Exchange Commission in Washington, D.C.. Forward-looking
statements are based on assumptions management believes to be
reasonable, including but not limited to the continued operation of
the mining operations from which Silver Wheaton purchases silver,
no material adverse change in the market price of commodities, that
the mining operations will operate in accordance with their public
statements and achieve their stated production outcomes, and such
other assumptions and factors as set out herein. Although Silver
Wheaton has attempted to identify important factors that could
cause actual results to differ materially from those contained in
forward-looking statements, there may be other factors that cause
results not to be as anticipated, estimated or intended. There can
be no assurance that such statements will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not
place undue reliance on forward-looking statements. Silver Wheaton
does not undertake to update any forward-looking statements that
are incorporated by reference herein, except in accordance with
applicable securities laws. Cautionary Language Regarding Reserves
and Resources Readers should refer to the Annual Information Form
of Silver Wheaton for the year ended December 31, 2008 and other
continuous disclosure documents filed by Silver Wheaton since
January 1, 2009 available on SEDAR at http://www.sedar.com/, for
further information on Mineral Reserves and Mineral Resources,
which is subject to the qualifications and notes set forth therein
as well as for additional information relating to Silver Wheaton
more generally. Mineral Resources which are not Mineral Reserves,
do not have demonstrated economic viability. Cautionary Note to
United States Investors Concerning Estimates of Measured, Indicated
and Inferred Resources: The information contained herein uses the
terms "Measured", "Indicated" and "Inferred" Resources. United
States investors are advised that while such terms are recognized
and required by Canadian regulations, the United States Securities
and Exchange Commission does not recognize them and expressly
prohibits U.S. registered companies from including such terms in
their filings with the SEC. "Inferred Mineral Resources" have a
great amount of uncertainty as to their existence, and as to their
economic and legal feasibility. It cannot be assumed that all or
any part of an Inferred Mineral Resource will ever be upgraded to a
higher category. Under Canadian rules, estimates of Inferred
Mineral Resources may not form the basis of feasibility or other
economic studies. United States investors are cautioned not to
assume that all or any part of Measured or Indicated Mineral
Resources will ever be converted into Mineral Reserves. United
States investors are also cautioned not to assume that all or any
part of an Inferred Mineral Resource exists, or is economically or
legally mineable. United States investors are urged to consider
closely the disclosure in Silver Wheaton's Form 40-F, a copy of
which may be obtained from Silver Wheaton or from
http://www.sec.gov/edgar.shtml. For further information: Brad Kopp,
Director, Investor Relations, Silver Wheaton Corp., Tel:
+1-800-380-8687, Email: ; Website: http://www.silverwheaton.com/
DATASOURCE: Silver Wheaton Corp. CONTACT: For further information:
Brad Kopp, Director, Investor Relations, Silver Wheaton Corp., Tel:
+1-800-380-8687, Email:
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