VANCOUVER, BC, May 16, 2023
/CNW/ - Lumina Gold Corp. (TSXV: LUM) (OTCQX: LMGDF) (the
"Company" or "Lumina") is pleased to announce that it entered
into a precious metals purchase agreement (the "Gold Stream") with
Wheaton Precious Metals International Ltd., a wholly owned
subsidiary of Wheaton Precious Metals Corp. ("Wheaton") in relation
to its 100% owned Cangrejos gold-copper project located in El Oro
Province, Ecuador (the "Project"
or "Cangrejos") on May 16, 2023. The
Gold Stream initially represents 6.6% of the payable gold produced
from the Project in exchange for US$48
million of pre-construction funding (the "Early Deposit")
and US$252 million of construction
funding (the "Upfront Payment").
Randy Smallwood, President and
CEO of Wheaton commented: "The Cangrejos Project is an
excellent addition to Wheaton's existing portfolio of high-quality,
low-cost assets as it should provide impactful, long-term growth as
well as significant exploration potential. We welcome the
opportunity to work with the team at Lumina who have done an
outstanding job at working to de-risk the Project and advancing it
towards construction."
Ross Beaty, Lumina's founder
and largest shareholder commented: "This transaction
validates the extensive technical work that the Lumina Group has
completed on Cangrejos since 2014. It will de-risk the execution of
the Cangrejos project and form a significant part of the
US$1 billion of required construction
capital. Cangrejos will represent one of the largest gold producers
in the world once built and Wheaton will benefit from its three
decades of mine life. We look forward to working with Wheaton's
extremely experienced team as the Project gets advanced."
Transaction Overview
The Gold Stream is composed of two funding segments, (i) the
Early Deposit to be paid during the completion of a feasibility
study (as such term is defined in National Instrument 43-101 –
Standards of Disclosure for Mineral Projects) and permitting
period, and (ii) the Upfront Payment to be paid during the
construction of the Project. The US$48
million Early Deposit provides Lumina with the capital it
requires to complete definition drilling, a feasibility study and
permitting work at the Project. The Upfront Payment of US$252 million provides approximately 25% of the
total construction funding required by the Project.
The Early Deposit of US$48 million
is comprised of four components:
- US$12 million at closing;
- US$10 million 6 months after
close;
- US$15 million 12 months after
close; and
- an US$11 million tranche that can
be drawn upon for specific pre-construction capital items.
The US$252 million Upfront Payment
will be funded throughout the two-and a-half-year construction
period for the Project.
In return for the Early Deposit and Upfront Payment, Lumina will
sell 6.6% of the payable gold production from the Project until
700,000 ounces of gold have been delivered, at which point the Gold
Stream will be reduced to 4.4% of the payable gold production.
Wheaton will pay a production payment representing 18.0% of the
spot price of gold for the first 700,000 ounces and 22.0% of the
spot price of gold thereafter.
In the event of a change of control, the Company may buy back
one-third of the Gold Stream from Wheaton until the earlier of
January 1, 2030 and the date that is
12 months after first production.
About Lumina Gold
Lumina Gold Corp. (TSXV: LUM) is a Vancouver, Canada based precious and base
metals exploration and development company focused on the Cangrejos
Gold-Copper Project located in El Oro Province, southwest
Ecuador. In 2023, the Company
completed a Preliminary Feasibility Study (the "PFS") for
Cangrejos, which is the largest primary gold deposit in
Ecuador. Lumina has an experienced
management team with a successful track record of advancing and
monetizing exploration projects.
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Further details are available on the Company's website at
https://luminagold.com/. To receive future news releases please
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LUMINA GOLD CORP.
Signed: "Marshall Koval"
Marshall Koval, President
& CEO, Director
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this news release.
Cautionary Note Regarding
Forward-Looking Information
Certain statements and information herein, including all
statements that are not historical facts, contain forward-looking
statements and forward-looking information within the meaning of
applicable securities laws. Such forward-looking statements or
information include but are not limited to statements or
information with respect to: the Company's ability to meet the
payable gold payments as required under the Gold Stream; the
transfer price of gold that Wheaton will pay the Company; the total
cost of construction of the Project; complete definition
drilling, a feasibility study or permitting work at the
Project; the Company's ability to secure the funds required
to complete construction of the Project; the Project's expected
life of mine; the development of the Project into one of the
largest gold producers in the world; the Company's ability to
develop the Project into a producing mine; and the buy back
by the Company of one third of the Gold Stream from Wheaton
following a change of control of the Company. Often, but not
always, forward-looking statements or information can be identified
by the use of words such as "will" or "projected" or variations of
those words or statements that certain actions, events or results
"will", "could", "are proposed to", "are planned to", "are expected
to" or "are anticipated to" be taken, occur or be achieved.
With respect to forward-looking statements and information
contained herein, the Company has made numerous assumptions
including among other things, assumptions about general business
and economic conditions; the prices of gold, copper and silver; the
Company's ability to meet its obligations under the Gold Stream and
other material agreements; the accuracy and reliability of
technical data, forecasts, estimates and studies, including the
PFS; the accuracy of slope guidance underlying the engineered pit
design; estimates of mineral resources and mineral reserves;
anticipated costs and expenditures; future results of operations;
ability to satisfy power infrastructure and water capacity
requirements; availability and ability to procure personnel,
machinery, supplies, and equipment from local sources where
possible; the characteristics of the Project producing innate
positive environmental impacts; tax rates and royalty rates
applicable to the Project; the relationship between the Company and
the local communities and its business partners; ability to operate
in a safe and effective manner; and the success of exploration,
development and processing activities. The foregoing list of
assumptions is not exhaustive.
Although management of the Company believes that the
assumptions made and the expectations represented by such
statements or information are reasonable, there can be no assurance
that a forward-looking statement or information herein will prove
to be accurate. Forward-looking statements and information by their
nature are based on assumptions and involve known and unknown
risks, uncertainties and other factors which may cause the
Company's actual results, performance or achievements, or industry
results, to be materially different from any future results,
performance or achievements expressed or implied by such
forward-looking statements or information. These factors include,
but are not limited to: risks relating to exploration activities
and accurately predicting mineralization; the timing and ability of
the Company to obtain necessary permits; risks relating to
inaccurate geological and engineering assumptions (including with
respect to the tonnage, grade and recoverability of reserves and
resources); risks relating to unanticipated operational
difficulties (including failure of equipment or processes to
operate in accordance with specifications or expectations, cost
escalation, unavailability of materials and equipment, government
action or delays in the receipt of government approvals, industrial
disturbances or other job action, and unanticipated events related
to health, safety and environmental matters); capital costs varying
significantly from estimates; business and economic conditions in
the mining industry generally; risks associated with the business
of the Company; the supply and demand for labour and other project
inputs; changes in commodity prices; changes in interest and
currency exchange rates; inflation and credit risks; risks relating
to adverse weather conditions; political risk and social unrest;
changes in general economic conditions or conditions in the
financial markets; and other risk factors as detailed from time to
time in the Company's continuous disclosure documents filed with
Canadian securities administrators. The Company does not undertake
to update any forward-looking information, except in accordance
with applicable securities laws.
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SOURCE Lumina Gold Corp.