Wheaton unveils $530 million in new streaming deals
Wheaton Precious Metals Corp. (TSX-WPM, NYSE-WPM) and its Wheaton Precious Metals International Ltd. unit have reached a definitive deal with entities advised by U.S. asset management firm Orion Resource Partners to acquire existing streams on Ivanhoe Mines Ltd.’s [TSX-IVN, OTC-IVPAF] Platreef project in South Africa and BMC Minerals’ Kudz Ze Kayah project in the Canadian Yukon.
BMC is a private United Kingdom-based resource company that is developing the Kudz Ze Kayah volcanogenic massive sulphide (VMS) project in south east Yukon.
In addition, Wheaton International has struck a new precious metals purchase agreement for a gold stream from Dalradian Gold Ltd.’s Curraghinalt project (the Curraghinalt stream) in Northern Ireland.
The agreements require $530 million in upfront cash payments from Wheaton and Wheaton International.
“The acquisition of these diverse, high-quality streams fits seamlessly into our portfolio of high-margin, low-cost assets, with near-term production from Platreef significantly adding to our already robust growth profile,’’ said Wheaton President and CEO Randy Smallwood.
On Thursday, Wheaton shares eased 0.62% or 38 cents to $60.99 on volume of 535,670. The shares trade in a 52-week range of $71.39 and $48.30.Whe
Of the upfront $530 million cash payment, $450 million will be paid to Orion upon closing of the acquisition of the Platreef and Kudz Ze Kayah streams, with an additional $5 million contingency payment in respect of the Kudz Ze Kayah stream.
Another $20 million will be paid to an affiliate of Dalradian Gold on an early deposit basis relative to the Curraghinalt stream, with an additional $55 million being paid during construction of the Curraghinalt project.
Closing of the acquisition of the Platreef, Kudz Ze Kayah and Curraghinalt streams is subject to typical terms and conditions and anticipated to occur within the fourth quarter of 2023 or early first quarter of 2024.
The Platreef project is located approximately 280 kilometres northeast of Johannesburg, in the Limpopo province of South Africa.
Platreef is described in Ivanhoe’s website as the world’s largest undeveloped precious metals project, also containing significant amounts of nickel and copper. Platreef is on track for first production in the third quarter of 2024, Ivanhoe has said.
Under the Platreef project gold stream agreement, Wheaton International will be entitled to purchase 62.5% of the payable gold until a total of 219,750 ounces of gold has been delivered to Wheaton, at which point Wheaton International will be entitled to purchase 50% of the payable gold production until a total of 428,300 ounces of gold has been delivered to Wheaton, at which point Wheaton will be entitled to purchase 3.125% of the payable gold production until certain conditions are met.
In addition, under the Platreef project palladium and platinum streams agreement, Wheaton will purchase 5.25% of the payable palladium and platinum until a total of 350,000 ounces of combined palladium and platinum have been received, at which point the stream will be reduced to 3.0% of the payable palladium and platinum production until 485,115 ounces have been delivered, at which point the stream will be reduced to 0.1% of the payable palladium and platinum production if certain conditions are met.