TIDMWPM
RNS Number : 7925Y
Wheaton Precious Metals Corp.
18 January 2022
January 17, 2022 TSX | NYSE | LSE: WPM
Vancouver, British Columbia
WHEATON PRECIOUS METALS announces the acquisition of a pRECIOUS
METALS STREAM from ADVENTUS MINING'S Curipamba project
Wheaton Precious Metals(TM) Corp. ("Wheaton" or the "Company")
is pleased to announce that its wholly-owned subsidiary, Wheaton
Precious Metals International Ltd. ("Wheaton International") has
entered into a definitive Precious Metal Purchase Agreement (the
"PMPA") with Alliance Metals International, a subsidiary of
Adventus Mining Corporation (collectively "Adventus") (TSX: ADZN)
in respect to the Curipamba Project ("Curipamba" or the "Project")
located in Ecuador. Curipamba is forecast to be a high-margin mine
in the lowest half of the copper cost curve with a 10-year open-pit
mine life and the potential to transition into an underground mine
subsequent to the open pit [1] .
"Wheaton has had a successful long-term partnership with
Adventus and welcomes the opportunity to support the development of
a project the caliber of Curipamba. Forecasted to be a high
quality, low-cost mine with significant exploration potential,
Curipamba's profile aligns well with Wheaton's accretive growth
strategy" said Randy Smallwood, Wheaton's President and Chief
Executive Officer. "Adventus has a strong entrepreneurial
reputation and shares Wheaton's vision that responsible mining
should benefit all stakeholders, including support for the
communities around the mines. We look forward to our continued
partnership with Adventus and shared success in Curipamba."
TRANSACTION DETAILS
(All values in US$ unless otherwise noted)
-- Upfront Consideration: Wheaton International will pay
Adventus total upfront cash consideration of $175.5 million (the
"Deposit"), $13 million of which is available pre-construction (the
"Early Deposit") and $500,000 of which will be paid to support
certain local community development initiatives around Curipamba.
The remainder will be payable in four staged installments during
construction, subject to various customary conditions being
satisfied.
-- Streamed Metal: Under the PMPA, Wheaton International will
purchase: (i) 50% of the payable gold production referenced from
Curipamba, dropping to 33% for the life of mine once 150,000 ounces
of refined gold have been delivered; and (ii) 75% of the payable
silver production referenced from Curipamba, dropping to 50% for
the life of mine once 4.6 million ounces of refined silver have
been delivered.
-- Production Profile(1) : Attributable production is forecast
to average 17,000 oz of gold and 551,000 oz of silver per year for
the first five years of production. Adventus anticipates
construction activities to begin as early as late 2022, with
commissioning and commencement of mine operations as early as
2024.
-- Production Payments: Wheaton International will make ongoing
payments for the gold and silver ounces delivered equal to 18% of
the spot prices ("Production Payment") until the value of gold and
silver delivered less the Production Payment is equal to the
Deposit, at which point the Production Payment will increase to 22%
of the spot prices.
-- Incremental Reserves and Resources ([2]) : The addition of
Curipamba will increase Wheaton's estimated Proven and Probable
gold reserves by 0.26 Moz and silver reserves by 7.1 Moz, Measured
and Indicated gold resources by 0.06 Moz and silver resources by
2.2 Moz, and Inferred gold resources by 0.02 Moz and silver
resources by 0.7 Moz. In addition, Wheaton believes significant
exploration potential exists within the large Curipamba property
demonstrated by the recent discovery of the Agua Santa prospect
which is approximately 4.5 km southwest of El Domo.
-- Community Investment Support: As part of the Deposit, Wheaton
International has agreed to provide $500,000 to support local
community development initiatives around Curipamba being advanced
by Adventus. In addition, by entering into the PMPA, Adventus is
eligible for additional community support through Wheaton's Partner
CSR Program which provides financial support for its mining
partners' economic, environmental and social initiatives within the
communities that are directly influenced by the mines.
-- Other Considerations:
o Curipamba will be subject to a 90-day completion test based on
a set mine throughput level and designed production forecast.
o Until the first drawdown of the Deposit after the Early
Deposit, Adventus would have a one-time option to repurchase 33% of
the stream (gold and silver) on a change of control of Adventus for
an amount ensuring a fixed internal rate of return to Wheaton
International.
o Adventus and certain of its subsidiaries will provide Wheaton
International with corporate guarantees and certain other security
over their assets.
o Wheaton also intends to provide up to US$5M in equity to
Adventus, subject to a maximum ownership level below 10%.
FINANCING THE TRANSACTIONS
As at September 30, 2021, the Company had approximately $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
and provides flexibility to acquire additional accretive mineral
stream interests.
ABOUT ADVENTUS MINING AND THE CURIPAMBA PROJECT
Adventus is a unique public company focused on copper-gold
exploration and development in Ecuador. Outside of Ecuador,
Adventus also owns a portfolio of exploration projects in Ireland
that are funded by commercial partners and equity investments.
Curipamba comprises seven mineral concessions representing
approximately 21,500 hectares and includes the advanced high-grade
copper-gold El Domo deposit. Curipamba is located in central
Ecuador approximately 150 km northeast of the major port city of
Guayaquil. El Domo is a flat-lying tabular shaped VMS deposit, with
mineralization beginning at 30 metres from surface and dimensions
of approximately 800 x 400 metres. Three well-maintained gravel
roads provide direct access to El Domo and most of the Curipamba
project area. Over 75,000 metres of diamond drilling has been
completed on El Domo to date. In 2021, Adventus completed a
feasibility study NI 43-101 Technical Report as well as completed
and submitted a detailed environmental and social impact assessment
(ESIA) report to the Government of Ecuador.
Attributable Gold Mineral Reserves and Mineral Resources -
CURIPAMBA
Category Tonnage Grade Contained
Mt Au g/t Au Moz
----------- -------- -------- ----------
Proven 1.6 2.83 0.14
Probable 1.7 2.23 0.12
P&P 3.2 2.52 0.26
Measured 0.0 0.00 0.00
Indicated 1.1 1.63 0.06
----------- -------- ----------
M&I 1.1 1.63 0.06
-------- ----------
Inferred 0.4 1.62 0.02
Attributable Silver Mineral Reserves and Mineral Resources -
CURIPAMBA
Category Tonnage Grade Contained
Mt Ag g/t Ag Moz
----------- -------- -------- ----------
Proven 2.4 41.4 3.1
Probable 2.5 49.7 4.0
P&P 4.9 45.7 7.1
Measured 0.0 0.0 0.0
Indicated 1.8 38.4 2.2
----------- -------- ----------
M&I 1.8 38.4 2.2
-------- ----------
Inferred 0.7 31.6 0.7
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. Adventus 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. Curipamba Project Mineral Reserves are reported as of October
22, 2021and Mineral Resources as of October 26, 2021.
7. Curipamba Project Mineral Reserves are reported above an NSR
cut-off of $32.99 assuming $1,630 per ounce gold, $21 per ounce
silver, $3.31 per pound copper, $0.92 per pound lead and $1.16 per
pound zinc.
8. Curipamba Project Mineral Resources are reported above an NSR
cut-off of $29.00 per tonne for the open pit and $105 per tonne for
the underground assuming $1,800 per ounce gold, $24 per ounce
silver, $4.00 per pound copper, $1.05 per pound lead and $1.30 per
pound zinc.
9. The Curipamba PMPA provides that Adventus will deliver 75% of
the silver production until 4.6 million ounces are delivered and
50% thereafter for the life of the mine and 50% of the gold
production until 150 thousand ounces are delivered and 33%
thereafter for the life of the mine. Attributable reserves and
resources have been calculated on the 75% / 50% basis for silver
and 50% / 33% basis for gold.
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
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 International of $175.5
million to Adventus and the satisfaction of each party's
obligations in accordance with the Curipamba PMPA , the receipt by
Wheaton of silver and gold production in respect of Curipamba, 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 Curipamba 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 $175.5 million to Adventus and the
satisfaction of each party's obligations in accordance with the
terms of the Curipamba 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.
Cautionary Language Regarding Reserves And Resources
For further information on Mineral Reserves and Mineral
Resources and on Wheaton more generally, readers should refer to
Wheaton's Annual Information Form for the year ended December 31,
2020 and other continuous disclosure documents filed by Wheaton
since January 1, 2021, available on SEDAR at www.sedar.com.
Wheaton's Mineral Reserves and Mineral Resources are subject to the
qualifications and notes set forth therein. 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 has been prepared in accordance with the
requirements of the securities laws in effect in Canada, which
differ from the requirements of United States securities laws. The
terms "mineral reserve", "proven mineral reserve" and "probable
mineral reserve" are Canadian mining terms defined in accordance
with Canadian National Instrument 43-101 - Standards of Disclosure
for Mineral Projects ("NI 43-101") and the Canadian Institute of
Mining, Metallurgy and Petroleum (the "CIM") - CIM Definition
Standards on Mineral Resources and Mineral Reserves, adopted by the
CIM Council, as amended (the "CIM Standards"). In addition, the
terms "mineral resource", "measured mineral resource", "indicated
mineral resource" and "inferred mineral resource" are defined in
and required to be disclosed by NI 43-101. Investors are cautioned
not to assume that any part or all of the mineral deposits in these
categories will ever be converted into reserves. "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 pre-feasibility studies, except in rare cases.
Investors are cautioned not to assume that all or any part of an
inferred mineral resource exists or is economically or legally
mineable. Mineral resources that are not mineral reserves do not
have demonstrated economic viability. Disclosure of "contained
ounces" in a resource is permitted disclosure under Canadian
regulations. The SEC has adopted amendments to its disclosure rules
to modernize the mineral property disclosure requirements for
issuers whose securities are registered with the SEC under the U.S.
Securities Exchange Act of 1934, as amended (the "Exchange Act").
These amendments became effective February 25, 2019 (the "SEC
Modernization Rules") with compliance required for the first fiscal
year beginning on or after January 1, 2021. Under the SEC
Modernization Rules, the historical property disclosure
requirements for mining registrants included in SEC Industry Guide
7 will be rescinded and replaced with disclosure requirements in
subpart 1300 of SEC Regulation S-K. Following the transition
period, as a foreign private issuer that is eligible to file
reports with the SEC pursuant to the multi-jurisdictional
disclosure system, the Company is not required to provide
disclosure on its mineral properties under the SEC Modernization
Rules and will continue to provide disclosure under NI 43-101. As a
result of the adoption of the SEC Modernization Rules, the SEC will
recognize estimates of "measured mineral resources", "indicated
mineral resources" and "inferred mineral resources." In addition,
the SEC has amended its definitions of "proven mineral
reserves" and "probable mineral reserves" to be "substantially
similar" to the corresponding definitions under the CIM Definition
Standards that are required under NI 43-101. However, while the
above terms are "substantially similar" to CIM Definition
Standards, there are differences in the definitions under the SEC
Modernization Rules and the CIM Definition Standards. Accordingly,
there is no assurance any mineral reserves or mineral resources
that the Company may report as "proven mineral reserves", "probable
mineral reserves", "measured mineral resources", "indicated mineral
resources" and "inferred mineral resources" under NI 43-101 would
be the same had the Company prepared the reserve or resource
estimates under the standards adopted under the SEC Modernization
Rules. Accordingly, information contained herein that describes
Wheaton's mineral deposits may not be comparable to similar
information made public by U.S. companies subject to reporting and
disclosure requirements under the United States federal securities
laws and the rules and regulations thereunder. United States
investors are urged to consider closely the disclosure in Wheaton's
Form 40-F, a copy of which may be obtained from Wheaton or from
https://www.sec.gov/edgar.shtml.
[1] ) 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. Based on report entitled "National Instrument (NI)
43-101 Technical Report: Feasibility Study for the Curipamba El
Domo Project, Central Ecuador" with an effective date of October
26, 2021. Production forecasts contain forward looking information
and readers are cautioned that actual outcomes may vary. S&P
data set for 2025 projected global cost curves.
[2] ) Please refer to the Attributable Mineral Reserves &
Mineral Resources table in this news release for full disclosure of
reserves and resources associated with Curipamba including
accompanying footnotes.
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