TSX | NYSE | LSE: WPM
VANCOUVER, BC, Dec. 13, 2021
/CNW/ - Wheaton Precious Metals™ Corp. ("Wheaton" or the "Company")
is pleased to announce that it has entered into a definitive
agreement to acquire the existing gold stream (the "Gold Stream")
held by New Gold Inc. ("New Gold") in respect of gold production
from the Blackwater Gold Project located in British Columbia, Canada (the "Blackwater
Project"). In addition, the Company has entered into a Precious
Metal Purchase Agreement (the "Silver Stream") with Artemis Gold
Inc. ("Artemis") (TSX: ARTG) in respect of silver production from
the Blackwater Project.
"The acquisition of the gold and silver streams on the
Blackwater Project further enhances and diversifies Wheaton's
existing portfolio of low-cost, high-quality, long-life mines. With
strong ESG commitments at every stage of development, compelling
economics and significant exploration upside potential, Blackwater
incorporates many of the attributes we seek for accretive growth,"
said Randy Smallwood, Wheaton's
President and Chief Executive Officer. "Artemis's approach of
disciplined, responsible resource development aligns well with our
own focus on promoting industry-leading mining practices. We are
proud to partner with Artemis in the advancement of the Blackwater
Project, which we believe is on track to develop into a top-tier
operation, producing socially and environmentally sound minerals,
right in our own backyard."
TRANSACTION DETAILS
- Upfront Consideration: Wheaton will pay total upfront
consideration of US$441 million for
the precious metal streams. Upon closing of the purchase of the
Gold Stream, Wheaton will pay New Gold US$300 million. Under the Silver Stream, Wheaton
will pay Artemis total upfront cash consideration of approximately
US$141 million, which is payable in
four equal installments during construction of the Blackwater
Project, subject to customary conditions being satisfied.
- Streamed Metal: Under the Gold Stream, Wheaton will be
entitled to receive 8% of the payable gold production until 279,908
ounces have been delivered, thereafter dropping to 4% of payable
gold production for the life of the mine. Under the Silver Stream,
Wheaton will be entitled to receive 50% of the payable silver
production until 17.8 million ounces ("Moz") have been delivered,
thereafter dropping to 33% of payable silver production for the
life of the mine.
- Delivery Payments: For gold ounces delivered, Wheaton
will make ongoing cash payments equal to 35% of the spot gold
price. For silver ounces delivered, Wheaton will make ongoing
cash payments ("Silver Production Payment") equal to 18% of the
spot silver price until the value of silver delivered less the
Silver Production Payment is equal to the upfront cash
consideration, at which point the Silver Production Payment will
increase to 22% of the spot silver price.
- Production Profile1: Attributable gold
production is forecast to average approximately 26 koz per year for
the first five full years of production and 28 koz per year for the
first ten full years. With a fixed silver recovery of 61%,
attributable silver production is forecast to average over 480 koz
per year for the first five full years of production, and over 670
koz per year for the first ten full years.
- Incremental Reserves and Resources2: The
Gold and Silver Streams will increase Wheaton's estimated Proven
and Probable gold reserves by 0.47 Moz and silver reserves by 31.0
Moz, Measured and Indicated gold resources by 0.15 Moz and silver
resources by 19.9 Moz, and Inferred gold resources by 0.01 Moz and
silver resources by 2.3 Moz. In addition, Wheaton believes
significant exploration upside potential exists as the Blackwater
Project deposit remains open to the North, Northwest and at depth,
and given the Gold Stream's substantial area of interest.
- Other Considerations:
-
- Artemis and certain of its subsidiaries will provide Wheaton
with corporate guarantees and other security.
- Artemis has waived its right of first offer with respect to the
purchase of the Gold Stream. New Gold has waived its right of first
refusal with respect to the Silver Stream.
FINANCING THE TRANSACTION
The $300 million acquisition price
for the Gold Stream will be paid on closing of the purchase
agreement. The $141 million upfront
deposit under the Silver Stream will be paid over the construction
of the Blackwater Project. As at September
30, 2021, the Company had approximately US$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 as well as
providing flexibility to acquire additional accretive mineral
stream interests.
ABOUT ARTEMIS AND THE BLACKWATER PROJECT
Artemis is a gold development company with a technically driven
approach to shareholder value creation through identifying,
acquiring and developing gold projects in mining friendly
jurisdictions using a disciplined staged approach to development,
managing risks while minimizing cost of capital to optimize
economics and returns for shareholders.
As disclosed by Artemis, the primary focus for Artemis is on
advancing construction of the Blackwater Project, a project with 8
million ounces of gold in reserves, Environmental Assessment
approval and the potential to develop into one of the largest gold
mines in Canada. The Blackwater
Project is forecast to be a first quartile gold mine3
with a 22 year mine life1. Artemis has disclosed that it
expects major construction to commence in the second quarter of
2022, with production commencing in the first quarter of 2024.
Attributable Gold Mineral Reserves and Mineral Resources –
Blackwater
Category
|
Tonnage
Mt
|
Grade
Au g/t
|
Contained
Au Moz
|
Proven
|
19.3
|
0.74
|
0.46
|
Probable
|
0.5
|
0.80
|
0.01
|
P&P
|
19.8
|
0.74
|
0.47
|
Measured
|
4.1
|
0.35
|
0.05
|
Indicated
|
6.4
|
0.49
|
0.10
|
M&I
|
10.5
|
0.44
|
0.15
|
Inferred
|
0.7
|
0.45
|
0.01
|
Attributable Silver Mineral Reserves and Mineral Resources –
Blackwater
Category
|
Tonnage
Mt
|
Grade
Ag g/t
|
Contained
Ag Moz
|
Proven
|
161.9
|
5.8
|
30.1
|
Probable
|
4.6
|
5.8
|
0.9
|
P&P
|
166.5
|
5.8
|
31.0
|
Measured
|
33.7
|
4.7
|
5.1
|
Indicated
|
52.9
|
8.7
|
14.8
|
M&I
|
86.6
|
7.1
|
19.9
|
Inferred
|
5.6
|
12.8
|
2.3
|
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. Artemis 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.
- Blackwater project Mineral Reserves are reported as of
September 10, 2021 and Mineral
Resources as of May 5, 2020.
- Blackwater project Mineral Reserves are reported above an NSR
cut-off of CAD$13.00 / tonne
assuming US$1,400 per ounce gold and
US$15.00 per ounce silver.
- Blackwater project Mineral Resources are reported above a gold
equivalent cut-off of 0.2 grams per tonne assuming US$1,400 per ounce gold and US$15.00 per ounce silver.
- The Blackwater Silver Stream and Gold Stream agreements provide
that Artemis will deliver respectively (i) 50% of the payable
silver production until 17.8 million ounces are delivered and 33%
thereafter for the life of the mine, and (ii) 8% of the payable
gold production until 279,908 ounces are delivered and 4%
thereafter for the life of the mine. Attributable reserves
and resources have been calculated on the 50% / 33% basis for
silver and 8% / 4% basis for gold, assuming closing of both the
Silver Stream and Gold Stream acquisition.
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).
__________________________________
|
1) Based on report entitled
"Blackwater Gold Project NI 43-101 Technical Report on Updated
Feasibility Study with an effective date of September 10, 2021.
Production forecasts contain forward looking information and
readers are cautioned that actual outcomes may vary. 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.
|
2) Please refer to the Attributable
Mineral Reserves & Mineral Resources table in this news release
for full disclosure of reserves and resources associated with the
Blackwater project including accompanying footnotes. The additional
Attributable Mineral Reserves & Mineral Resources for gold are
conditional on the Gold Stream closing.
|
3) S&P data set for 2024
projected global cost curves.
|
CAUTIONARY NOTE REGARDING
FORWARD-LOOKINGSTATEMENTS
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 of approximately
US$141 million to Artemis 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 Blackwater Project, payment by Wheaton of
US$300 million to New Gold and the
satisfaction of each party's obligations in accordance with the
Gold Stream purchase agreement, the satisfaction of each party's
obligations in accordance with the Gold Stream, the receipt by
Wheaton of gold production in respect of the Blackwater Project,
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 Silver Stream, the Gold Stream
purchase agreement and the Gold Stream, 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
approximately US$141 million to
Artemis and the satisfaction of each party's obligations in
accordance with the terms of the Silver Stream, the payment of
US$300 million to New Gold and the
satisfaction of each party's obligations in accordance with the
terms of the Gold Stream purchase agreement, 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 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.
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SOURCE Wheaton Precious Metals Corp.