REG - Wheaton Precious Met - Agreement to Terminate Stream at Yauliyacu Mine

Wheaton Precious MetalsAnnouncement

19/08/2022 07:00

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RNS Number : 5419W  Wheaton Precious Metals Corp.  19 August 2022

 

August 18, 2022                                                                                  TSX | NYSE | LSE: WPM
Vancouver, British Columbia

 

Wheaton Precious Metals Enters Into Agreement To Terminate Its Existing Silver
Stream On The Yauliyacu Mine

 

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, 2022 1  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 ounces 2  ("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.

 

For further information, please contact:

 

Patrick Drouin

Investor Relations

Wheaton Precious Metals Corp.

Tel: 1-844-288-9878

Email: info@wheatonpm.com

Website: www.wheatonpm.com

 

 

 

End Notes

 

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 (http://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 (http://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.

(( 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.

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