TSX | NYSE | LSE: WPM
VANCOUVER, BC, Jan. 17, 2022 /PRNewswire/ - Wheaton Precious
Metals™ 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
pit1.
"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 Profile1:
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
Resources2: 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:
-
- Curipamba will be subject to a 90-day completion test based on
a set mine throughput level and designed production forecast.
- 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.
- Adventus and certain of its subsidiaries will provide Wheaton
International with corporate guarantees and certain other security
over their assets.
- 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
Mt
|
Grade Au
g/t
|
Contained 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
Mt
|
Grade Ag
g/t
|
Contained 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:
- 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").
- 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").
- 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:
- Neil Burns, M.Sc., P.Geo. (Vice
President, Technical Services); and
- Ryan Ulansky, M.A.Sc., P.Eng.
(Vice President, Engineering
both employees of the Company (the "Company's QPs").
- 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.
- Mineral Resources, which are not Mineral Reserves, do not have
demonstrated economic viability.
- Curipamba Project Mineral Reserves are reported as of
October 22, 2021and Mineral Resources
as of October 26, 2021.
- 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.
- 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.
- 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).
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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SOURCE Wheaton Precious Metals Corp.