VANCOUVER, British Columbia,
June 28, 2018 /PRNewswire/ --
TSX: WPM
NYSE: WPM
Wheaton Precious Metals™ Corp. ("Wheaton" or the "Company") is
pleased to announce that it has completed the acquisition of a
Cobalt Stream from a subsidiary of Vale S.A. ("Vale") (NYSE: VALE).
Under the Cobalt Stream, Wheaton will be entitled to receive an
amount of finished cobalt equal to a fixed percentage of cobalt
production from the Voisey's Bay mine. Wheaton has paid Vale an
upfront cash consideration of US$390
million and will make ongoing payments of 18% of the Metal
Bulletin market price ("cobalt spot price") per cobalt pound
delivered[1]. The upfront cash payment was
paid by using amounts drawn from the Company's US$2 billion revolving credit facility. The
closing of this transaction is in conjunction with Vale completing
a separate streaming agreement with Cobalt 27 Capital Corp.
("Cobalt 27"). Wheaton and Cobalt 27 have provided Vale with an
aggregate of US$690 million in
funding for the combined purchase of cobalt equal to 75% of
Voisey's Bay cobalt production effective January 1, 2021.
As of January 1, 2021, Wheaton
will be entitled to receive from Vale an amount of cobalt equal to
42.4% of the Voisey's Bay mine cobalt production until the delivery
of 31 million pounds of cobalt and an amount of cobalt equal to
21.2% of cobalt production thereafter for the life of mine.
Voisey's Bay is one of the lowest-cost, highest-margin nickel mines
globally, ranking in the bottom half of the nickel cost
curve[2] and is located in Newfoundland and Labrador, Canada.
Full details of the transaction can be found in Wheaton's news
release dated June 11, 2018.
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 "forward-looking
information" within the meaning of applicable Canadian securities
legislation. Forward-looking statements, which are all statements
other than statements of historical fact, include, but are not
limited to, statements with respect to:
- the construction timeline, including completion, of the mine
expansion, including the underground mines, at Voisey's Bay by
Vale;
- the commencement and timing of delivery of cobalt by Vale under
the Cobalt Stream; and
- the receipt of cobalt by Wheaton of cobalt production in
respect of Voisey's Bay.
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:
- that each party does not satisfy its obligations in accordance
with the terms of the Cobalt Stream;
- Vale does not meet the construction timeline, including
anticipated completion, of the mine expansion, including the
underground mines, at Voisey's Bay;
- Vale is unable to commence, or the timing of delivery of cobalt
by Vale is delayed or deferred under the Cobalt Stream or Wheaton
is unable to sell its cobalt production delivered under the Cobalt
Stream at acceptable prices or at all; and
- the decrease in demand for cobalt, the decrease in uses for
cobalt or the discovery of new supplies of cobalt, any or all of
which could result in a decrease to the price of cobalt or a
decrease in the ability to sell cobalt.
Forward-looking statements are based on assumptions management
currently believes to be reasonable, including but not limited
to:
- Vale is able to meet the construction timeline, including
anticipated completion, of the mine expansion, including the
underground mines, at Voisey's Bay;
- Vale is able to commence and meet its timing for delivery of
cobalt under the Cobalt Stream and Wheaton is able to sell cobalt
production delivered under the Cobalt Stream at acceptable
prices;
- Vale meets its obligations under the development agreement with
the Government of Newfoundland and
Labrador and the impacts and
benefits agreements with the Innu Nation and the Nunatsiavut
government; and
- the demand and uses for cobalt will not significantly decrease
and the supply of cobalt will not significantly increase.
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. 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. Accordingly, 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 investors 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. Wheaton does not undertake to update any forward-looking
statements that are included or incorporated by reference herein,
except in accordance with applicable securities laws.
1) Production payment is set at 18% of cobalt spot prices, increasing to
22% upon the balance of upfront consideration being reduced to zero.
2) Based on Wood Mackenzie est. of 2nd quarter of 2018 by-product cost
curve for nickel mines.
Patrick Drouin, Senior Vice
President, Investor Relations, Wheaton Precious Metals Corp., Tel:
+1-844-288-9878, Email: info@wheatonpm.com, Website:
http://www.wheatonpm.com