TIDMWPM
RNS Number : 2335R
Wheaton Precious Metals Corp.
25 October 2023
October 25 , 2023
Vancouver, British Columbia
Wheaton Precious Metals Announces the Acquisition of a
New Silver Stream on the Mineral Park Mine
Vancouver, British Columbia - Wheaton Precious Metals(TM) Corp.
("Wheaton" or the "Company") is pleased to announce that its
wholly-owned subsidiary, Wheaton Precious Metals International Ltd.
("WPMI") has entered into a definitive Precious Metals Purchase
Agreement (the "Silver Stream") with Waterton Copper Corp., a
subsidiary of Waterton Copper LP ("Waterton Copper") in respect to
its 100% owned Mineral Park Mine located in Arizona, USA (the
"Project" or "Mineral Park").
"Wheaton is excited to bring Mineral Park back into our
portfolio given our long history with the mine, particularly given
the work Waterton Copper has done to optimize the operation," said
Randy Smallwood, Wheaton's President and Chief Executive Officer.
"Our unique understanding of Mineral Park, and its potential,
positions us well to assist Waterton Copper in bringing the mine
back into production in a sustainable manner. As global efforts to
transition to a low-carbon economy accelerate, critical metals,
such as copper, that are produced responsibly within politically
stable jurisdictions, have never been more important.
"Waterton Copper is delighted to have Wheaton Precious Metals'
support," said Isser Elishis, Executive Chairman of Waterton Copper
. " Waterton is investing approximately $600 million to optimize
Mineral Park including significant capital investments in new
primary crushers, secondary and pebble crushing circuits, and new
higher-power SAG mills, which are expected to result in decades of
operational excellence ."
Transaction Details
(All values in US$ unless otherwise noted)
-- Upfront Consideration: WPMI will pay Waterton Copper total
upfront cash consideration of $115 million (the "Deposit") in four
payments during construction (three installments of $25 million and
a final installment of $40 million).
-- Streamed Metal: Under the Silver Stream, WPMI will purchase
100% of the payable silver from the Project for the life of the
mine. Payable silver is calculated using a fixed payable factor of
90%.
-- Production Profile(1) : Attributable production is forecast
to average over 0.69 million ounces ( "Moz") of silver per year for
the first five years of production and over 0.74 Moz of silver per
year for the life of mine, with construction to be completed by the
end of Q1 2025. Mineral Park is forecast to have a 12-year mine
life, with the potential to expand the mine life to over 20
years.
-- Production Payments: WPMI will make ongoing payments for the
silver ounces delivered equal to 18% of the spot price of silver
("Production Payment") until the uncredited deposit is reduced to
nil and 22% of the spot price of silver thereafter.
-- Incremental Reserves and Resources ([1]) : The addition of
Mineral Park will increase Wheaton's total estimated Proven and
Probable Mineral silver reserves by 14.6 Moz, Measured and
Indicated Mineral silver resources by 18.4 Moz and Inferred silver
resources by 16.2 Moz.
-- Other Considerations:
o The Silver Stream will include a customary completion
test.
o WPMI will provide a secured debt facility of up to $25 million
once the full upfront consideration has been paid.
o WPMI has also obtained a right of first refusal on any future
precious metals streams, royalty, prepay or similar
transactions.
o Waterton Copper and Origin Mining Company, LLC (the direct
owner of Mineral Park, "Origin") will provide WPMI with corporate
guarantees and certain other security over their assets.
o Waterton Copper is expected to comply in all material respects
with WPMI's Partner/Supplier Code of Conduct, which outlines
Wheaton's expectations in regard to environmental, social and
governance ("ESG") matters.
Financing the Transactions
As at June 30, 2023, the Company had approximately $829 million
of cash on hand, which we believe 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 the acquisition of the Silver Stream as well as all
outstanding commitments and known contingencies and provides
flexibility to acquire additional accretive mineral stream
interests.
About Wheaton Precious Metals
Wheaton is the world's premier precious metals streaming company
with the highest-quality portfolio of long-life, low-cost assets.
Its business model offers investors commodity price leverage and
exploration upside but with a much lower risk profile than a
traditional mining company. Wheaton delivers amongst the highest
cash operating margins in the mining industry, allowing it to pay a
competitive dividend and continue to grow through accretive
acquisitions. As a result, Wheaton has consistently outperformed
gold and silver, as well as other mining investments. Wheaton is
committed to strong ESG practices and giving back to the
communities where Wheaton and its mining partners operate. Wheaton
creates sustainable value through streaming for all of its
stakeholders.
About Waterton Copper and Mineral Park
Owned and operated by Origin, a subsidiary of Waterton Copper
LP, Mineral Park is a polymetallic mine located in north-west
Arizona, 18 miles north of Kingsman. A copper-molybdenum-silver
porphyry deposit with a long mining history, Mineral Park is
currently under Phase 2 construction which is expected to be
completed by the end of Q1 2025. Waterton Copper is fully funded
and is investing approximately $600 million to execute Phase 2 of
its operating plan, which will bring the site to over one hundred
million pounds of copper equivalent annually and fully modernize
the operation.
Attributable Silver Mineral Reserves and Mineral Resources -
Mineral Park Mine
Category Tonnage Grade Contained
Mt Ag g/t Ag Moz
----------- -------- -------- ----------
Proven 42.4 2.6 3.5
Probable 141.3 2.4 11.1
P&P 183.7 2.5 14.6
Measured 22.6 2.1 1.5
Indicated 261.5 2.0 16.9
----------- -------- ----------
M&I 284.1 2.0 18.4
-------- ----------
Inferred 341.2 1.5 16.2
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.
5. Mineral Resources, which are not Mineral Reserves, do not
have demonstrated economic viability.
6. Mineral Park Project Mineral Reserves are reported as of
September 29, 2023 and Mineral Resources as of October 30,
2021.
7. Mineral Park Mineral Reserves are reported above an NSR
cut-off of $10.50 per tonne assuming $2.81 per pound copper, $14.25
per pound molybdenum and $16.13 per ounce silver.
8. Mineral Park Mineral Resources are reported above a 0.15
percent copper equivalent cut-off assuming $3.45 per pound copper,
$10.00 per pound molybdenum and $23.00 per ounce silver.
9. The Silver Stream provides that Waterton Copper will deliver
silver equal to 100% of the payable silver production for the life
of the mine.
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:
Wheaton Precious Metals:
Investor Contact:
Emma Murray
Vice President, Investor Relations
Tel: 1-844-288-9878
Email: info@wheatonpm.com
Media Contact:
Simona Antolak
Vice President, Communications & Corporate Affairs
Tel: 604-639-9870
Email: simona.antolak@wheatonpm.com
Waterton Copper:
Paul Nielson, P. Eng
Head of Development Portfolio, Principal
Tel: 1-647-289-8246
Email: pnielson@watertonglobal.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, statements with respect to payment by WPMI of
$115 million to Waterton Copper and the satisfaction of each
party's obligations in accordance with the Silver Stream, the
receipt by Wheaton of silver production in respect of the Project,
the future price of commodities, the estimation of future
production from 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, the commencement, timing
and achievement of construction, expansion or improvement projects
by Wheaton's PMPA counterparties at mineral stream interests owned
by Wheaton (the "Mining Operations"), the payment of upfront cash
consideration to counterparties under PMPAs, the satisfaction of
each party's obligations in accordance with PMPAs and royalty
arrangements and the receipt by the Company of precious metals and
cobalt production in respect of the applicable Mining Operations
under PMPAs or other payments under royalty arrangements, the
ability of Wheaton's PMPA counterparties to comply with the terms
of a PMPA (including as a result of the business, mining operations
and performance of Wheaton's PMPA counterparties) and the potential
impacts of such on Wheaton, future payments by the Company in
accordance with PMPAs, the costs of future production, the
estimation of produced but not yet delivered ounces, the impact of
epidemics (including the COVID-19 virus pandemic), including the
potential heightening of other risks, future sales of common shares
under the ATM program, continued listing of the Company's common
shares, any statements as to future dividends, the ability to fund
outstanding commitments and the ability to continue to acquire
accretive PMPAs, including any acceleration of payments, projected
increases to Wheaton's production and cash flow profile, projected
changes to Wheaton's production mix, the ability of Wheaton's PMPA
counterparties to comply with the terms of any other obligations
under agreements with the Company, the ability to sell precious
metals and cobalt production, confidence in the Company's business
structure, the Company's assessment of taxes payable and the impact
of the CRA Settlement, possible domestic audits for taxation years
subsequent to 2016 and international audits, the Company's
assessment of the impact of any tax reassessments, the Company's
intention to file future tax returns in a manner consistent with
the CRA Settlement, the Company's climate change and environmental
commitments, and assessments of the impact and resolution of
various legal and tax matters, including but not limited to audits.
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 relating to the satisfaction of each
party's obligations in accordance with the terms of the Silver
Stream, risks associated with fluctuations in the price of
commodities (including Wheaton's ability to sell its precious
metals or cobalt production at acceptable prices or at all), risks
related to 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), the absence of control
over the Mining Operations and having to rely on the accuracy of
the public disclosure and other information Wheaton receives from
the Mining Operations, uncertainty in the estimation of production
from Mining Operations, uncertainty in the accuracy of mineral
reserve and mineral resource estimation, risks of significant
impacts on Wheaton or the Mining Operations as a result of an
epidemic (including the COVID-19 virus pandemic), the ability of
each party to satisfy their obligations in accordance with the
terms of the PMPAs, the estimation of future production from Mining
Operations, Wheaton's interpretation of, compliance with or
application of, tax laws and regulations or accounting policies and
rules being found to be incorrect, any challenge or reassessment by
the CRA of the Company's tax filings being successful and the
potential negative impact to the Company's previous and future tax
filings, assessing the impact of the CRA Settlement (including
whether there will be any material change in the Company's facts or
change in law or jurisprudence), potential implementation of a 15%
global minimum tax, counterparty credit and liquidity, mine
operator concentration, indebtedness and guarantees, hedging,
competition, claims and legal proceedings against Wheaton or the
Mining Operations, security over underlying assets, governmental
regulations, international operations of Wheaton and the Mining
Operations, exploration, development, operations, expansions and
improvements at the Mining Operations, environmental regulations,
climate change, Wheaton and the Mining Operations ability to obtain
and maintain necessary licenses, permits, approvals and rulings,
Wheaton and the Mining Operations ability to comply with applicable
laws, regulations and permitting requirements, lack of suitable
supplies, infrastructure and employees to support the Mining
Operations, inability to replace and expand mineral reserves,
including anticipated timing of the commencement of production by
certain Mining Operations (including increases in production,
estimated grades and recoveries), uncertainties of title and
indigenous rights with respect to the Mining Operations,
environmental, social and governance matters, Wheaton and the
Mining Operations ability to obtain adequate financing, the Mining
Operations ability to complete permitting, construction,
development and expansion, global financial conditions, Wheaton's
acquisition strategy 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.sedarplus.ca and
Wheaton's Form 40-F for the year ended December 31, 2022 on file
with the U.S. Securities and Exchange Commission on EDGAR (the
"Disclosure"). Forward-looking statements are based on assumptions
management currently believes to be reasonable, including (without
limitation): the payment of $115 million to Waterton Copper and the
satisfaction of each party's obligations in accordance with the
terms of the Silver Stream, 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 reserves and mineral
resource estimates from Mining Operations (including reserve
conversion rates) are accurate, that each party will satisfy their
obligations in accordance with the PMPAs, that Wheaton will
continue to be able to fund or obtain funding for outstanding
commitments, that Wheaton will be able to source and obtain
accretive PMPAs, that neither Wheaton nor the Mining Operations
will suffer significant impacts as a result of an epidemic
(including the COVID-19 virus pandemic), that any outbreak or
threat of an outbreak of a virus or other contagions or epidemic
disease will be adequately responded to locally, nationally,
regionally and internationally, without such response requiring any
prolonged closure of the Mining Operations or having other material
adverse effects on the Company and counterparties to its PMPAs,
that the trading of the Company's common shares will not be
adversely affected by the differences in liquidity, settlement and
clearing systems as a result of multiple listings of the Common
Shares on the LSE, the TSX and the NYSE, that the trading of the
Company's common shares will not be suspended, and that the net
proceeds of sales of common shares, if any, will be used as
anticipated, that expectations regarding the resolution of legal
and tax matters will be achieved (including ongoing CRA audits
involving the Company), that Wheaton has properly considered the
interpretation and application of Canadian tax law to its structure
and operations, that Wheaton has filed its tax returns and paid
applicable taxes in compliance with Canadian tax law, that
Wheaton's application of the CRA Settlement is accurate (including
the Company's assessment that there will be no material change in
the Company's facts or change in law or jurisprudence), 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,
2022, which was filed on March 31, 2023 and other continuous
disclosure documents filed by Wheaton since January 1, 2023,
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. Numbers have been rounded
as required by reporting guidelines and may result in apparent
summation differences.
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
Company reports information regarding mineral properties,
mineralization and estimates of mineral reserves and mineral
resources in accordance with Canadian reporting requirements which
are governed by, and utilize definitions required by, 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"). These definitions differ from the
definitions adopted by the United States Securities and Exchange
Commission ("SEC") under the United States Securities Act of 1933,
as amended (the "Securities Act") which are applicable to U.S.
companies. 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 by the SEC. 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 refer to the Attributable Mineral Reserves &
Mineral Resources table in this news release for full disclosure of
reserves and resources associated with Mineral Park including
accompanying footnotes.
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