TSX: WPM
NYSE: WPM
VANCOUVER, BC, June 22, 2020
/PRNewswire/ - Wheaton Precious Metals™ Corp. ("Wheaton" or the
"Company") is pleased to announce that its wholly-owned subsidiary,
Wheaton Precious Metals International Ltd. ("Wheaton
International") has signed a non-binding term sheet with Caldas
Gold Corp. ( "Caldas Gold") (TSX-V: CGC) to enter into a
Precious Metals Purchase Agreement (the "Precious Metals Stream")
for the Marmato Project located in Colombia. The Marmato Project comprises an
operating Upper Mine and the Marmato Deeps Zone ("MDZ")
development, both of which are covered by the Precious Metals
Stream.
"Wheaton is excited to partner with Caldas Gold in developing the Marmato Project.
The strength and potential upside of this project was especially
apparent during our onsite due diligence trip, prior
to travel restrictions being put into place," said Randy Smallwood, President and Chief Executive
Officer of Wheaton Precious Metals. "We remain unwavering in our
focus on delivering the highest quality portfolio of precious
metals production to our
shareholders through our top tier asset
base, strong organic growth profile and
acquisition of accretive growth opportunities such as Marmato. As
can be seen, Wheaton continues to be very active on the
corporate development front despite limitations resulting from the
current global COVID-19 pandemic."
Upon entering into the Precious Metals Stream, Wheaton
International will purchase 6.5% of the gold production and 100% of
the silver production until 190,000 ounces of gold and 2.15 million
ounces of silver have been delivered, after which the stream drops
to 3.25% of the gold production and 50% of the silver production
for the life of mine. Under the proposed Precious Metals Stream,
Wheaton International will pay a total cash consideration of
$110 million1,
$38 million of which is payable upon
closing and the remaining portion of which is payable during the
construction of the MDZ project, subject to receipt of required
permits and licenses, sufficient financing having been obtained to
cover total expected capital expenditures, and other customary
conditions. In addition, Wheaton International will make ongoing
payments equal to 18% of the spot gold and silver price until the
uncredited portion of the upfront payment is reduced to zero, and
22% of the spot gold and silver price thereafter. The entering into
of the Precious Metals Stream is subject to, among other matters,
the negotiation and completion of definitive
documentation.2
As part of the Precious Metals Stream, Caldas Gold has agreed to provide funding to
support the local communities around the Marmato Project.
About the Marmato Project
Caldas Gold's Marmato Project
comprises the existing producing underground gold and silver mine
in the Upper Zone, the existing 1,200 tonnes per day ("tpd")
processing plant and the area encompassing the MDZ. The current
mine has been in operation since 1991. The Marmato Project has
excellent infrastructure as it is located by the Pan American
Highway with access to Medellin to
the north and Manizales to the south, and has access to the
national electricity grid, which runs near the property.
The Preliminary Economic Assessment completed in 2019 charts a
path for expansion of mining operations at the Marmato Project,
ultimately comprised of two distinct operations, the existing Upper
Mine operation and the MDZ project, which sits directly below the
Upper Zone vein system. In 2019, the Upper Mine produced 25,750
ounces of gold and 39,560 ounces of silver. Implementation of a
mine optimization program in the Upper Mine is expected to increase
gold production starting in 2020 and reduce total cash costs per
ounce. A Prefeasibility Study, currently in process and expected to
be completed mid-2020, is focused on the development of mining
operations in the MDZ, including construction of an additional
4,000 tpd plant and new dry stack tailings storage facilities.
Mechanized mining, using an underground longhole stoping method, in
the MDZ is expected to further increase production commencing by
2023.
About Wheaton Precious Metals Corp.
Wheaton is the world's premier precious metals streaming company
with the highest-quality portfolio of long-life, low-cost assets.
Its business model offers investors commodity price leverage and
exploration upside but with a much lower risk profile than a
traditional mining company. Wheaton delivers amongst the highest
cash operating margins in the mining industry, allowing it to pay a
competitive dividend and continue to grow through accretive
acquisitions. As a result, Wheaton has consistently outperformed
gold and silver, as well as other mining investments. Wheaton
creates sustainable value through streaming.
End Notes
1 All figures are presented
in United States dollars unless
otherwise noted.
2 There can be no assurance that the Precious
Metals Stream will be completed on the terms set out in the
non-binding term sheet, or at all.
CAUTIONARY NOTE REGARDING FORWARD
LOOKING-STATEMENTS
This press release contains "forward-looking statements" within
the meaning of the United States Private Securities Litigation
Reform Act of 1995 and "forward-looking information" within the
meaning of applicable Canadian securities legislation concerning
the business, operations and financial performance of Wheaton and,
in some instances, the business, mining operations and performance
of Wheaton's precious metals purchase
agreement ("PMPA") counterparties. Forward-looking
statements, which are all statements other than statements of
historical fact, include, but are not limited to, statements with
respect to the successful negotiation and entering into of a
definitive documentation by Wheaton International with Caldas,
payment by Wheaton International of US$110
million to Caldas and the satisfaction of each party's
obligations in accordance with the Precious Metals Stream
agreement, the receipt by Wheaton International of silver and gold
production in respect of the Marmato Project, the future price of
commodities, the estimation of future production from mineral
stream interests owned by Wheaton (the "Mining Operations")
(including in the estimation of production, mill throughput,
grades, recoveries and exploration potential), the estimation of
mineral reserves and mineral resources (including the estimation of
reserve conversion rates) and the realization of such estimations,
the commencement, timing and achievement of construction, expansion
or improvement projects by Wheaton's PMPA counterparties at Mining
Operations, the ability of Wheaton's PMPA counterparties to comply
with the terms of a PMPA (including as a result of the business,
mining operations and performance of Wheaton's PMPA counterparties)
and the potential impacts of such on Wheaton, the costs of future
production, the estimation of produced but not yet delivered
ounces, any statements as to future dividends, the ability to fund
outstanding commitments and the ability to continue to acquire
accretive PMPAs, future payments by the Company in accordance with
PMPAs, including any acceleration of payments, projected increases
to Wheaton's production and cash flow profile, projected changes to
Wheaton's production mix, the ability of Wheaton's PMPA
counterparties to comply with the terms of any other obligations
under agreements with the Company, the ability to sell precious
metals and cobalt production, confidence in the Company's business
structure, the Company's assessment of taxes payable and the impact
of the CRA Settlement for years subsequent to 2010, possible audits
for taxation years subsequent to 2015, the Company's intention to
file future tax returns in a manner consistent with the CRA
Settlement, and assessments of the impact and resolution of various
legal and tax matters, including but not limited to outstanding
class actions and audits. 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",
"projects", "intends", "anticipates" or "does not anticipate", or
"believes", "potential", 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 Wheaton to be
materially different from those expressed or implied by such
forward-looking statements, including but not limited to risks
associated with any specific risks relating to the completion of
documentation and diligence for the Precious Metals Stream
agreement, the satisfaction of each party's obligations in
accordance with the terms of the Precious Metals Stream agreement,
fluctuations in the price of commodities (including Wheaton's
ability to sell its precious metals or cobalt production at
acceptable prices or at all), the Mining Operations (including
fluctuations in the price of the primary or other commodities mined
at such operations, regulatory, political and other risks of the
jurisdictions in which the Mining Operations are located, actual
results of mining, risks associated with the exploration,
development, operating, expansion and improvement of the Mining
Operations, environmental and economic risks of the Mining
Operations, and changes in project parameters as plans continue to
be refined), the absence of control over the Mining Operations and
relying on the accuracy of the public disclosure and other
information Wheaton receives from the Mining Operations,
uncertainty in the estimation of production from Mining Operations,
uncertainty in the accuracy of mineral reserve and mineral resource
estimation, the ability of each party to satisfy their obligations
in accordance with the terms of the PMPAs, the estimation of future
production from Mining Operations, Wheaton's interpretation of,
compliance with or application of, tax laws and regulations or
accounting policies and rules being found to be incorrect, any
challenge or reassessment by the CRA of the Company's tax filings
being successful and the potential negative impact to the Company's
previous and future tax filings, assessing the impact of the CRA
Settlement for years subsequent to 2010 (including whether there
will be any material change in the Company's facts or change in law
or jurisprudence), credit and liquidity, indebtedness and
guarantees, mine operator concentration, hedging, competition,
claims and legal proceedings against Wheaton or the Mining
Operations, security over underlying assets, governmental
regulations, international operations of Wheaton and the Mining
Operations, exploration, development, operations, expansions and
improvements at the Mining Operations, environmental regulations
and climate change, Wheaton and the Mining Operations ability to
obtain and maintain necessary licenses, permits, approvals and
rulings, Wheaton and the Mining Operations ability to comply with
applicable laws, regulations and permitting requirements, lack of
suitable infrastructure and employees to support the Mining
Operations, inability to replace and expand mineral reserves,
including anticipated timing of the commencement of production by
certain Mining Operations (including increases in production,
estimated grades and recoveries), uncertainties of title and
indigenous rights with respect to the Mining Operations, Wheaton
and the Mining Operations ability to obtain adequate financing, the
Mining Operations ability to complete permitting, construction,
development and expansion, global financial conditions, and other
risks discussed in the section entitled "Description of the
Business – Risk Factors" in Wheaton's Annual Information Form
available on SEDAR at www.sedar.com, and in Wheaton's Form 40-F for
the year ended December 31, 2019 and
Form 6-K filed March 11, 2020 both on
file with the U.S. Securities and Exchange Commission in
Washington, D.C. (the
"Disclosure"). Forward-looking statements are based on assumptions
management currently believes to be reasonable, including (without
limitation): the completion of documentation and diligence in
respect of the Precious Metals Stream agreement, the payment of
US$110 million to Caldas and the
satisfaction of each party's obligations in accordance with the
terms of the Precious Metals Stream agreement, that there will be
no material adverse change in the market price of commodities, that
the Mining Operations will continue to operate and the mining
projects will be completed in accordance with public
statements and achieve their stated production estimates, that
the mineral reserve and mineral resource estimates from Mining
Operations (including reserve conversion rates) are accurate, that
each party will satisfy their obligations in accordance with the
PMPAs, that Wheaton will continue to be able to fund or obtain
funding for outstanding commitments, that Wheaton will be able to
source and obtain accretive PMPAs, that expectations regarding the
resolution of legal and tax matters will be achieved (including
ongoing class action litigation and CRA audits involving the
Company), that Wheaton has properly considered the interpretation
and application of Canadian tax law to its structure and
operations, that Wheaton has filed its tax returns and paid
applicable taxes in compliance with Canadian tax law, that
Wheaton's application of the CRA Settlement for years subsequent to
2010 is accurate (including the Company's assessment that there
will be no material change in the Company's facts or change in law
or jurisprudence for years subsequent to 2010), and such other
assumptions and factors as set out in the Disclosure. There can be
no assurance that forward-looking statements will prove to be
accurate and even if events or results described in the
forward-looking statements are realized or substantially realized,
there can be no assurance that they will have the expected
consequences to, or effects on, Wheaton. Readers should not place
undue reliance on forward-looking statements and are cautioned that
actual outcomes may vary. The forward-looking statements included
herein are for the purpose of providing readers with information to
assist them in understanding Wheaton's expected financial and
operational performance and may not be appropriate for other
purposes. Any forward looking statement speaks only as of the date
on which it is made, reflects Wheaton's management's current
beliefs based on current information and will not be updated except
in accordance with applicable securities laws. Although Wheaton has
attempted to identify important factors that could cause actual
results, level of activity, performance or achievements to differ
materially from those contained in forward–looking statements,
there may be other factors that cause results, level of activity,
performance or achievements not to be as anticipated, estimated or
intended.
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SOURCE Wheaton Precious Metals Corp.