Silver Wheaton closes acquisition of silver production from Barrick Gold Corporation
September 22 2009 - 4:00PM
PR Newswire (US)
TSX: SLW NYSE: SLW VANCOUVER, Sept. 22 /PRNewswire-FirstCall/ --
Silver Wheaton Corp. ("Silver Wheaton" or the "Company") (TSX,
NYSE:SLW) is pleased to announce that it has closed the previously
announced purchase from Barrick Gold Corporation ("Barrick") of the
equivalent of 25% of the life of mine silver production from its
Pascua-Lama project, as well as the equivalent of 100% of the
silver production from its Lagunas Norte, Pierina and Veladero
mines until the end of 2013. Silver Wheaton will pay to Barrick a
total upfront cash deposit of US$625 million, of which US$212.5
million was paid upon today's closing, with three further deposits
of US$137.5 million due on the first, second and third
anniversaries. Silver Wheaton will also make ongoing cash payments
for each ounce of silver delivered under the agreement equal to the
lesser of US$3.90 (subject to a one percent annual adjustment
commencing three years after project completion at Pascua-Lama) and
the prevailing market price. FINANCING THE ACQUISITION To pay the
initial upfront cash deposit of US$212.5 million, Silver Wheaton
used cash on hand and funds temporarily drawn against its revolving
debt facility. Upon closing a recently announced US$250 million
bought deal equity financing, expected by September 30, 2009 (see
press release dated September 8, 2009), the revolving debt facility
is anticipated to be repaid in full and Silver Wheaton expects to
have approximately US$140 million cash on hand. The remaining
upfront cash deposits of US$137.5 million per annum, for the next
three years, are forecast 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 contained silver within Barrick's reported proven and probable
gold reserves, with an additional 88 million ounces of contained
silver within Barrick's reported measured and indicated gold
resources. 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. 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. 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. DATASOURCE: Silver Wheaton Corp.
CONTACT: Brad Kopp, Director, Investor Relations, Silver Wheaton
Corp., Tel: 1-800-380-8687, Email: , Website:
http://www.silverwheaton.com/
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