TSX | NYSE | LSE: WPM
VANCOUVER, BC, Aug. 18,
2022 /CNW/ - Wheaton Precious Metals™ Corp.
("Wheaton" or the "Company") is announcing that it has entered into
a definitive agreement with certain subsidiaries of Glencore plc
("Glencore") (LSE: GLEN) to terminate its silver stream on the
Yauliyacu Mine in Peru for a cash
payment of US$150 million, less
the aggregate value of any deliveries to Wheaton of silver produced
in 2022 prior to closing. Wheaton has agreed to terminate the
stream in order to help facilitate the sale by Glencore of the
Yauliyacu Mine.
"Yauliyacu has been part of Wheaton's portfolio since 2006 and
has been integral to the history of our company. Combined with San
Dimas and Zinkgruvan, Yauliyacu gave us the scale to grow the
streaming business and become the company we are today," said
Randy Smallwood, Wheaton's President
and Chief Executive Officer. "Consistent with a core principle of
working with our partners, Wheaton has agreed to terminate the
stream, adding even more financial capacity to explore new
opportunities that we believe are in the best interests of our
shareholders. Glencore was one of the first mining companies to
recognize the value that is created for all stakeholders through
the streaming model, and we thank them for their stewardship of
this project and look forward to maintaining our strong partnership
on existing and potential future developments."
Wheaton acquired the silver stream on the Yauliyacu Mine in 2006
for an upfront consideration of US$285
million and has subsequently generated over US$485 million in cash flow from the stream.
Combined with the termination payment, Wheaton will have generated
an absolute return of over 220% of the original
investment.
The closing of the transaction is contingent on Glencore
divesting the Yauliyacu mine by December 31,
20221 and is subject to other customary
conditions.
As a result of the transaction, Wheaton now expects average
annual production for the five-year period ending December 31, 2026, to be approximately 800,000
gold equivalent ounces2 ("GEOs") (from 820,000
previously) and for the ten-year period ending December 31, 2031, to be approximately 850,000
GEOs (from 870,000 previously). Production in 2022 is
expected to remain between 640,000 and 680,000 GEOs.
End Notes
________________________
1 Glencore has the option, but not the obligation,
to terminate the silver stream even if it does not divest Yauliyacu
by December 31, 2022.
2 Commodity price assumptions for the gold equivalent
production and sales in 2022 are $1,800 / ounce gold, $24 / ounce silver, and $2,100 / ounce palladium and $33 / pound cobalt. Other metal includes
palladium and cobalt.
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, the termination
of the Yauliyacu silver stream for $150
million, the value of silver produced and delivered after
January 1, 2022 and the satisfaction
of each party's obligations in accordance with definitive
documentation relating to the termination of the Yauliyacu silver
stream. 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 termination of the Yauliyacu silver
stream and the satisfaction of each party's obligations in
accordance with the terms of the definitive documentation relating
to the termination of the Keno Hill silver stream, 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, 2021 and Form 6-K
filed March 10, 2022 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, 2021 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 receipt of
$150 million from Glencore, the
estimated value of silver to be produced and delivered after
January 1, 2022 and the satisfaction
of each party's obligations in accordance with the terms of the
definitive documentation relating to the termination of the
Yauliyacu silver stream, 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.
View original
content:https://www.prnewswire.com/news-releases/wheaton-precious-metals-enters-into-agreement-to-terminate-its-existing-silver-stream-on-the-yauliyacu-mine-301608913.html
SOURCE Wheaton Precious Metals Corp.