TIDMWPM
RNS Number : 4676W
Wheaton Precious Metals Corp.
22 December 2021
December 22, 2021 TSX | NYSE | LSE: WPM
Vancouver, British Columbia
WHEATON PRECIOUS METALS announces acquisition of a gold and
platinum stream from generation mining's marathon project
Wheaton Precious Metals(TM) Corp. ("Wheaton" or the "Company")
is pleased to announce that it has entered into a binding
arrangement with Generation Mining Limited ("Gen Mining") (TSX:
GENM) for a Precious Metal Purchase Agreement (the "Marathon PMPA")
in respect to the Marathon Project located in Ontario, Canada (the
"Marathon Project").
"The Marathon Project provides Wheaton with accretive, near-term
growth that further diversifies our existing portfolio and
preserves our focus on precious metals," said Randy Smallwood,
Wheaton's President and Chief Executive Officer. "Wheaton is proud
to support Gen Mining in the responsible development of the
Marathon Project, recently projected to have one of the lowest
operational carbon footprints of any mine in the world, once
producing. While Wheaton will be streaming the byproduct platinum
and gold from the mine, the primary metals the Marathon Project is
forecast to produce are palladium and copper, which are crucial for
the global transition to a low-carbon economy."
MARATHON PMPA TRANSACTION DETAILS
-- Under the Marathon PMPA, Wheaton will purchase 100% of the
payable gold production until 150 thousand ounces ("koz") have been
delivered, thereafter dropping to 67% of payable gold production
for the life of the mine and 22% of the payable platinum production
until 120 koz have been delivered, thereafter dropping to 15% for
the life of mine.
-- Wheaton will pay Gen Mining a total upfront cash
consideration of C$240 million, C$40 million of which will be paid
on an early deposit basis prior to construction to be used for
development of the Marathon Project, with the remainder payable in
four staged installments during construction, subject to various
customary conditions being satisfied and pre-determined completion
tests(1) .
-- Wheaton will make ongoing payments for the gold and platinum
ounces delivered equal to 18% of the spot prices ("Production
Payment") until the value of gold and platinum delivered less the
Production Payment is equal to the upfront consideration of C$240
million, at which point the Production Payment will increase to 22%
of the spot prices.
-- Gen Mining and certain of its subsidiaries, including the
owner of the Marathon Project, will provide Wheaton with corporate
guarantees and other security over their assets.
-- Completion of the Marathon PMPA is subject to the closing of
Gen Mining's acquisition of the remaining 16.5% interest in the
Marathon Project, as announced by Gen Mining on December 8,
2021.
-- The first advance of the early deposit under the Marathon
PMPA is expected to occur early in 2022, subject to the completion
of certain corporate matters and customary conditions.
MARATHON PROJECT OVERVIEW
-- The Marathon Project is forecast to be high-margin palladium
mine with a 13-year mine life(2) .
-- Attributable production once the mine and mill are fully
ramped up is forecast to average over 16 koz of gold and 14 koz of
platinum per year for the first five years of production, and
approximately 15 koz of gold and 11 koz of platinum per year for
the first ten full years(2)
-- Gen Mining anticipates construction activities to begin in
2022, with production commencing in 2024.
-- Significant exploration potential exists within Gen Mining's
strategic land package which covers over 220 km(2) , including the
25 kms of strike length along the Eastern Gabbro series that hosts
the Marathon and Sally deposits and multiple prospects including
Biiwobik, Four Dams, Skipper, Boyer and Redstone. Gen Mining's
exploration potential also includes the Geordie deposit which is
part of the Trans Coldwell Group and is hosted within the center of
the Complex(3) .
-- Subsequent to the closing of this acquisition, the Marathon
Project will add to Wheaton's estimated Proven and Probable gold
reserves by 0.26 Moz and platinum by 0.17 Moz, Measured and
Indicated gold resources by 0.18 Moz and platinum by 0.10 Moz, and
Inferred gold resources by 0.04 Moz and platinum by 0.02 Moz.
FINANCING THE TRANSACTION
As at September 30, 2021, the Company had approximately US$372
million of cash on hand, which when combined with the liquidity
provided by the available credit under the $2 billion revolving
term loan and ongoing operating cash flows, positions the Company
well to fund all outstanding commitments and known contingencies,
including the recently announced acquisition of silver and gold
streams in respect of the Blackwater project, and provides
flexibility to acquire additional accretive mineral stream
interests.
ABOUT GENERATION MINING AND THE MARATHON PROJECT
Gen Mining's focus is the development of the Marathon Project, a
large undeveloped platinum group metals deposit in Northwestern
Ontario. Gen Mining released the results of its Feasibility Study
on March 3, 2021 and published the NI43-101 Technical Report dated
March 25, 2021. On December 13, 2021, an independent report
prepared by Skarn Associates estimated the Marathon Project, once
producing, to be ranked as having one of the lowest operational
carbon footprints for a mine in both Canada and the world per tonne
of copper-equivalent produced. The Marathon property covers a land
package of approximately 22,000 hectares, or 220 square kilometres.
Gen Mining has announced that it has entered into a binding
arrangement to acquire the remaining 16.5% interest in the Marathon
Project held by a subsidiary of Sibanye Stillwater Limited, which
will increase Gen Mining's interest in the Marathon Project to
100%.
Attributable Gold Mineral Reserves and Mineral Resources -
Marathon Project
Category Tonnage Grade Contained
Mt Au g/t Au Moz
----------- -------- -------- ----------
Proven 85.1 0.07 0.19
Probable 32.6 0.06 0.06
P&P 117.7 0.07 0.26
Measured 19.4 0.08 0.05
Indicated 66.6 0.06 0.13
----------- -------- ----------
M&I 86.0 0.07 0.18
-------- ----------
Inferred 22.7 0.05 0.04
Attributable Platinum Mineral Reserves and Mineral Resources -
Marathon Project
Category Tonnage Grade Contained
Mt Pt g/t Pt Moz
----------- -------- -------- ----------
Proven 18.7 0.2 0.13
Probable 7.2 0.2 0.04
P&P 25.9 0.2 0.17
Measured 4.4 0.2 0.03
Indicated 15.0 0.1 0.07
----------- -------- ----------
M&I 19.4 0.2 0.10
-------- ----------
Inferred 5.1 0.1 0.02
Notes on Mineral Reserves & Mineral Resources:
1. All Mineral Reserves and Mineral Resources have been
estimated in accordance with the 2014 Canadian Institute of Mining,
Metallurgy and Petroleum (CIM) Standards for Mineral Resources and
Mineral Reserves and National Instrument 43-101 - Standards for
Disclosure for Mineral Projects ("NI 43-101").
2. Mineral Reserves and Mineral Resources are reported above in
millions of metric tonnes ("Mt"), grams per metric tonne ("g/t")
and millions of ounces ("Moz").
3. Qualified persons ("QPs"), as defined by the NI 43-101, for
the technical information contained in this document (including the
Mineral Reserve and Mineral Resource estimates) are:
a. Neil Burns, M.Sc., P.Geo. (Vice President, Technical Services); and
b. Ryan Ulansky, M.A.Sc., P.Eng. (Vice President, Engineering),
both employees of the Company (the "Company's QPs").
4. The Mineral Resources reported in the above tables are
exclusive of Mineral Reserves. Generation report Mineral Resources
inclusive of Mineral Reserves. The Company's QPs have made the
exclusive Mineral Resource estimates for the mine based on average
mine recoveries and dilution.
5. Mineral Resources, which are not Mineral Reserves, do not
have demonstrated economic viability.
6. Marathon Project Mineral Reserves are reported as of
September 15, 2020 and Mineral Resources as of June 30, 2020.
7. Marathon Project Mineral Reserves are reported above an NSR
cut-offs ranging from of CAD$18.00 per tonne to CAD$21.33 per tonne
assuming US$1,500 per ounce palladium, US$900 per ounce platinum,
US$2.75 per pound copper, US$1,300 per ounce gold and US$16.00 per
ounce silver.
8. Marathon Project Mineral Resources are reported above an NSR
cut-off of CAD$13.00 per tonne assuming US$1,600 per ounce
palladium, US$900 per ounce platinum, US$3.00 per pound copper,
US$1,500 per ounce gold and US$18.00 per ounce silver.
9. The Marathon PMPA provides that Generation will deliver 100%
of the gold production until 150 thousand ounces are delivered and
67% thereafter for the life of the mine and 22% of the platinum
production until 120 thousand ounces are delivered and 15%
thereafter for the life of the mine. Attributable reserves and
resources have been calculated on the 100% / 67% basis for gold and
22% / 15% basis for platinum.
Neil Burns, P.Geo., Vice President, Technical Services for
Wheaton Precious Metals and Ryan Ulansky, P.Eng., Vice President,
Engineering, are a "qualified person" as such term is defined under
National Instrument 43-101, and have reviewed and approved the
technical information disclosed in this news release (specifically
Mr. Burns has reviewed mineral resource estimates and Mr. Ulansky
has reviewed the mineral reserve estimates).
For further information, please contact:
Patrick Drouin
Investor Relations
Wheaton Precious Metals Corp.
Tel: 1-844-288-9878
Email: info@wheatonpm.com
Website: www.wheatonpm.com
____________________
[1]) All amounts will be paid in US$ calculated in reference to
the C$ amounts set out above.
2) Based on report entitled "Feasibility Study: Marathon
Palladium & Copper Project, Ontario, Canada" with an effective
date of March 3, 2021. Production forecasts contain forward looking
information and readers are cautioned that actual outcomes may
vary. Please see "Cautionary Note Regarding Forward
Looking-Statements" at the end of this news release for material
risks, assumptions, and important disclosure associated with this
information.
3) The Marathon PMPA area of interest includes the strategic
land package until certain thresholds are reached, after which the
area of interest is reduced to the current Marathon leases.
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, payment by Wheaton of C$240 million to Gen
Mining and the satisfaction of each party's obligations in
accordance with the Marathon PMPA , 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
and the commencement, timing and achievement of construction,
expansion or improvement projects by Wheaton's PMPA counterparties
at Mining Operations. 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 satisfaction of each party's
obligations in accordance with the terms of the Marathon PMPA ,
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), 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, 2020 and Form
6-K filed March 11, 2021 both available on EDGAR at www.sec.gov ,
as well as the risks set out in Wheaton's management's discussions
and analysis for the period ended December 31, 2020 available on
SEDAR and EDGAR (together, the "Disclosure"). Forward-looking
statements are based on assumptions management currently believes
to be reasonable, including (without limitation): the payment of
C$240 million to Gen Mining and the satisfaction of each party's
obligations in accordance with the terms of the Marathon PMPA ,
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, 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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