TSX | NYSE | LSE: WPM
VANCOUVER, BC, Dec. 22, 2021 /PRNewswire/ - Wheaton
Precious Metals™ Corp. ("Wheaton" or the "Company") is pleased to
announce that it has entered into a binding arrangement with
Generation Mining Limited ("Gen Mining") (TSX: GENM) for a Precious
Metal Purchase Agreement (the "Marathon PMPA") in respect to the
Marathon Project located in Ontario,
Canada (the "Marathon Project").
"The Marathon Project provides Wheaton with accretive, near-term
growth that further diversifies our existing portfolio and
preserves our focus on precious metals," said Randy Smallwood, Wheaton's President and Chief
Executive Officer. "Wheaton is proud to support Gen Mining in the
responsible development of the Marathon Project, recently projected
to have one of the lowest operational carbon footprints of any mine
in the world, once producing. While Wheaton will be streaming the
byproduct platinum and gold from the mine, the primary metals the
Marathon Project is forecast to produce are palladium and copper,
which are crucial for the global transition to a low-carbon
economy."
MARATHON PMPA TRANSACTION DETAILS
- Under the Marathon PMPA, Wheaton will purchase 100% of the
payable gold production until 150 thousand ounces ("koz") have been
delivered, thereafter dropping to 67% of payable gold production
for the life of the mine and 22% of the payable platinum production
until 120 koz have been delivered, thereafter dropping to 15% for
the life of mine.
- Wheaton will pay Gen Mining a total upfront cash consideration
of C$240 million, C$40 million of which will be paid on an early
deposit basis prior to construction to be used for development of
the Marathon Project, with the remainder payable in four staged
installments during construction, subject to various customary
conditions being satisfied and pre-determined completion
tests1.
- Wheaton will make ongoing payments for the gold and platinum
ounces delivered equal to 18% of the spot prices ("Production
Payment") until the value of gold and platinum delivered less the
Production Payment is equal to the upfront consideration of
C$240 million, at which point the
Production Payment will increase to 22% of the spot prices.
- Gen Mining and certain of its subsidiaries, including the owner
of the Marathon Project, will provide Wheaton with corporate
guarantees and other security over their assets.
- Completion of the Marathon PMPA is subject to the closing of
Gen Mining's acquisition of the remaining 16.5% interest in the
Marathon Project from Sibanye Stillwater Limited, as announced by
Gen Mining on December 8, 2021.
- The first advance of the early deposit under the Marathon PMPA
is expected to occur early in 2022, subject to the completion of
certain corporate matters and customary conditions.
MARATHON PROJECT OVERVIEW
- The Marathon Project is forecast to be high-margin palladium
mine with a 13-year mine life2.
- Attributable production once the mine and mill are fully ramped
up is forecast to average over 16 koz of gold and 14 koz of
platinum per year for the first five years of production, and
approximately 15 koz of gold and 11 koz of platinum per year for
the first ten full years2.
- Gen Mining anticipates construction activities to begin in
2022, with production commencing in 2024.
- Significant exploration potential exists within Gen Mining's
strategic land package which covers over 220 km2,
including the 25 kms of strike length along the Eastern Gabbro
series that hosts the Marathon and Sally deposits and multiple
prospects including Biiwobik, Four Dams, Skipper, Boyer and
Redstone. Gen Mining's exploration potential also includes
the Geordie deposit which is part of the Trans Coldwell Group and
is hosted within the center of the Complex3.
- Subsequent to the closing of this acquisition, the Marathon
Project will add to Wheaton's estimated Proven and Probable gold
reserves by 0.26 Moz and platinum by 0.17 Moz, Measured and
Indicated gold resources by 0.18 Moz and platinum by 0.10 Moz, and
Inferred gold resources by 0.04 Moz and platinum by 0.02 Moz.
FINANCING THE TRANSACTION
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,
including the recently announced acquisition of silver and gold
streams in respect of the Blackwater project, and provides
flexibility to acquire additional accretive mineral stream
interests.
ABOUT GENERATION MINING AND THE MARATHON PROJECT
Gen
Mining's focus is the development of the Marathon Project, a large
undeveloped platinum group metals deposit in Northwestern Ontario. Gen Mining released the
results of its Feasibility Study on March 3,
2021 and published the NI43-101 Technical Report dated
March 25, 2021. On December 13, 2021, an independent report prepared
by Skarn Associates estimated the Marathon Project, once producing,
to be ranked as having one of the lowest operational carbon
footprints for a mine in both Canada and the world per tonne of
copper-equivalent produced. The Marathon property covers a land
package of approximately 22,000 hectares, or 220 square kilometres.
Gen Mining has announced that it has entered into a binding
arrangement to acquire the remaining 16.5% interest in the Marathon
Project held by a subsidiary of Sibanye Stillwater Limited, which
will increase Gen Mining's interest in the Marathon Project to
100%.
Attributable Gold Mineral Reserves and Mineral Resources –
Marathon Project
Category
|
Tonnage
Mt
|
Grade
Au g/t
|
Contained
Au Moz
|
|
|
Proven
|
85.1
|
0.07
|
0.19
|
|
Probable
|
32.6
|
0.06
|
0.06
|
|
P&P
|
117.7
|
0.07
|
0.26
|
|
Measured
|
19.4
|
0.08
|
0.05
|
|
Indicated
|
66.6
|
0.06
|
0.13
|
|
M&I
|
86.0
|
0.07
|
0.18
|
|
Inferred
|
22.7
|
0.05
|
0.04
|
|
Attributable Platinum Mineral Reserves and Mineral
Resources – Marathon Project
Category
|
Tonnage
Mt
|
Grade
Pt g/t
|
Contained
Pt Moz
|
|
|
Proven
|
18.7
|
0.2
|
0.13
|
|
Probable
|
7.2
|
0.2
|
0.04
|
|
P&P
|
25.9
|
0.2
|
0.17
|
|
Measured
|
4.4
|
0.2
|
0.03
|
|
Indicated
|
15.0
|
0.1
|
0.07
|
|
M&I
|
19.4
|
0.2
|
0.10
|
|
Inferred
|
5.1
|
0.1
|
0.02
|
|
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. Generation 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.
- Marathon Project Mineral Reserves are reported as of
September 15, 2020 and Mineral
Resources as of June 30, 2020.
- Marathon Project Mineral Reserves are reported above an NSR
cut-offs ranging from of CAD$18.00
per tonne to CAD$21.33 per tonne
assuming US$1,500 per ounce
palladium, US$900 per ounce platinum,
US$2.75 per pound copper,
US$1,300 per ounce gold and
US$16.00 per ounce silver.
- Marathon Project Mineral Resources are reported above an NSR
cut-off of CAD$13.00 per tonne
assuming US$1,600 per ounce
palladium, US$900 per ounce platinum,
US$3.00 per pound copper,
US$1,500 per ounce gold and
US$18.00 per ounce silver.
- The Marathon PMPA provides that Generation will deliver 100% of
the gold production until 150 thousand ounces are delivered and 67%
thereafter for the life of the mine and 22% of the platinum
production until 120 thousand ounces are delivered and 15%
thereafter for the life of the mine. Attributable reserves and
resources have been calculated on the 100% / 67% basis for gold and
22% / 15% basis for platinum.
Neil Burns, P.Geo., Vice
President, Technical Services for Wheaton Precious Metals and
Ryan Ulansky, P.Eng., Vice
President, Engineering, are a "qualified person" as such term is
defined under National Instrument 43-101, and have reviewed and
approved the technical information disclosed in this news release
(specifically Mr. Burns has reviewed mineral resource estimates and
Mr. Ulansky has reviewed the mineral reserve estimates).
____________________
|
1) All amounts will
be paid in US$ calculated in reference to the C$ amounts set out
above.
|
2) Based on report
entitled "Feasibility Study: Marathon Palladium & Copper
Project, Ontario, Canada" with an effective date of March 3, 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.
|
3) The Marathon PMPA
area of interest includes the strategic land package until certain
thresholds are reached, after which the area of interest is reduced
to the current Marathon leases.
|
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 of C$240 million to Gen
Mining and the satisfaction of each party's obligations in
accordance with the Marathon PMPA, 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 Marathon 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 C$240 million to Gen Mining and the satisfaction
of each party's obligations in accordance with the terms of the
Marathon 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.
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SOURCE Wheaton Precious Metals Corp.