TIDMWPM
RNS Number : 7056Z
Wheaton Precious Metals Corp.
17 May 2023
May 16, 2023
Vancouver, British Columbia
Wheaton Precious Metals Announces the Acquisition of a
Gold Stream from Lumina Gold's Cangrejos Project
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.
("Wheaton International") has entered into a definitive Precious
Metal Purchase Agreement (the "Gold Stream") with Lumina Gold Corp.
("Lumina") (TSXV: LUM) in respect to its 100% owned Cangrejos
gold-copper project located in El Oro Province, Ecuador (the
"Project" or "Cangrejos"). Cangrejos is forecast to be a
high-margin mine in the lowest half of the cost curve with a
26-year mine life [1] .
"The Cangrejos Project is an excellent addition to Wheaton's
existing portfolio of high-quality, low-cost assets as it should
provide accretive, long-term growth as well as significant
exploration potential," said Randy Smallwood, Wheaton's President
and Chief Executive Officer. "We welcome the opportunity to work
with the team at Lumina who have done an outstanding job at working
to de-risk the Project and advancing it towards construction. As
with any transaction Wheaton enters into, responsible and
sustainable mining practices are paramount, and Wheaton looks
forward to supporting Lumina both financially as they construct
Cangrejos and with their ongoing comprehensive community engagement
efforts."
Transaction Details
(All values in US$ unless otherwise noted)
-- Upfront Consideration: Wheaton International will pay Lumina
total upfront cash consideration of $300 million (the "Deposit"),
$48 million of which is available pre-construction (the "Early
Deposit"). The payment schedule for the Early Deposit and Deposit
are as follows:
o The Early Deposit of $48 million is comprised of four
components: 1) $12 million on closing; 2) $10 million 6 months
after close; 3) $15 million 12 months after close; and 4) an $11
million tranche that can be drawn upon for committed acquisition of
surface rights.
o The remaining $252 million will be payable in staged equal
installments during construction, subject to various customary
conditions being satisfied.
-- Streamed Metal: Under the Gold Stream, Wheaton International
will purchase 6.6% of the payable gold from the Project until
700,000 ounces ("oz") of gold has been delivered, at which point
the stream will be reduced to 4.4% of the payable gold production
for the life of the mine.
-- Production Profile(1) : Attributable production is forecast
to average over 24,000 oz of gold per year for the first ten years
of production and over 24,500 oz of gold per year for the life of
mine.
-- Production Payments: Wheaton International will make ongoing
payments for the gold ounces delivered equal to 18% of the spot
price of gold ("Production Payment") until the uncredited deposit
is reduced to nil and 22.0% of the spot price of gold
thereafter.
-- Incremental Reserves and Resources ([2]) : The addition of
Cangrejos will increase Wheaton's total estimated Proven and
Probable gold reserves by 0.76 million ounces ("Moz"), Measured and
Indicated gold resources by 0.25 Moz, and Inferred gold resources
by 0.16 Moz. In addition, Wheaton believes there is strong
exploration potential within the Cangrejos property.
-- Other Considerations:
o The Gold Stream will include a customary completion test.
o As part of the transaction, Wheaton has obtained a right of
first refusal on any future gold and silver streams.
o In the event of a change of control, Lumina may purchase
one-third of the Gold Stream from Wheaton until the earlier of
January 1, 2030, and the date that is 12 months after first
production.
o Lumina and certain of its subsidiaries will provide Wheaton
International with corporate guarantees and certain other security
over their assets.
Financing the Transactions
As at March 31, 2023, the Company had approximately $800 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 Gold Stream as well as all
outstanding commitments and known contingencies and provides
flexibility to acquire additional accretive mineral stream
interests.
Sustainability Considerations for the Cangrejos Project
Based on work done by Lumina, several of the Project's innate
characteristics and design elements have been identified that serve
to potentially minimize its environmental impacts:
-- Since 2014, Lumina has been engaging with communities and is
committed to involve affected communities and stakeholders through
ongoing participation and consultation. The project will seek
opportunities to create enduring economic benefits for societal
groups and communities that are directly affected by
operations.
-- The majority of electrical power is anticipated to come from
renewable hydroelectric sources.
-- Proximity to port is expected to minimize
transportation-based greenhouse gas emission impacts.
-- The dry stack tailings filtration plant is projected to
recycle a substantial portion of tailings water for reuse in the
processing plant.
-- No acid rock drainage conditions are expected to be present
in either the waste rock storage facility or the dry stack tailings
facility.
-- Aerial ore conveyor is predicted to minimize land
clearance.
-- The Project is proposed to include progressive reclamation
and revegetation of tailings and waste rock facilities.
-- Reforestation of previously impacted concession lands outside
of mining facilities is anticipated to serve as offsets of
disturbed areas.
About Lumina Gold Corp. and the Cangrejos Project
Lumina Gold Corp. is a Vancouver, Canada based precious and base
metals exploration and development company focused on the Cangrejos
Gold-Copper Project located in El Oro Province, southwest Ecuador.
The Company has completed a Preliminary Feasibility Study for
Cangrejos (2023), which is the largest primary gold deposit in
Ecuador. Lumina has an experienced management team with a
successful track record of advancing and monetizing exploration
projects.
Attributable Gold Mineral Reserves and Mineral Resources -
Cangrejos Project
Category Tonnage Grade Contained
Mt Au g/t Au Moz
----------- -------- -------- ----------
Proven -- -- --
Probable 43.5 0.55 0.76
P&P 43.5 0.55 0.76
Measured -- -- --
Indicated 20.6 0.38 0.25
----------- -------- ----------
M&I 20.6 0.38 0.25
-------- ----------
Inferred 13.0 0.39 0.16
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. Lumina 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. Cangrejos Project Mineral Reserves are reported as of March
30, 2023 and Mineral Resources as of January 30, 2023.
7. Cangrejos Project Mineral Reserves are reported above
declining NSR cut-offs of between $23.00 and $7.76 per tonne
assuming $1,500 per ounce gold, $3.00 per pound copper and $18.00
per ounce silver.
8. Cangrejos Project Mineral Resources are reported above a 0.25
grams per tonne gold equivalent cut-off assuming $1,600 per ounce
gold, $3.50 per pound copper and $11.00 per pound molybdenum and
$21.00 per ounce silver.
9. The Cangrejos PMPA provides that Lumina will deliver gold
equal to 6.6% of the payable gold production until 700,000 ounces
of gold are delivered and 4.4% thereafter for the life of the mine.
Attributable gold reserves and resources have been calculated on
the 6.6% / 4.4% basis.
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 or Emma Murray
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 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 Wheaton International of $300 million to Lumina and the
satisfaction of each party's obligations in accordance with the
Gold Stream, the receipt by Wheaton of gold 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 Gold
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.sedar.com 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 $300 million to Lumina and the
satisfaction of each party's obligations in accordance with the
terms of the Gold 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.
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 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. Production forecasts contain forward looking
information and readers are cautioned that actual outcomes may
vary. Based on report entitled "National Instrument (NI) 43-101
Technical Report: Pre-Feasibility Study for the Cangrejos Project,
Ecuador" with an effective date of April 7, 2023. S&P data set
for 2029 projected global gold 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 Cangrejos including
accompanying footnotes.
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END
ACQARMFTMTMBMIJ
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May 17, 2023 02:07 ET (06:07 GMT)
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