REG - Wheaton Precious Met - First Phase Completion Test Achieved at Salobo

Wheaton Precious MetalsAnnouncement

22/11/2023 07:15

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RNS Number : 3021U  Wheaton Precious Metals Corp.  22 November 2023

 

 
November 21, 2023
Vancouver, British Columbia
 

 
 

Wheaton Precious Metals and Vale Base Metals Announce Achievement of First
Phase Completion Test at Salobo

 

Vancouver, British Columbia/Toronto, Ontario - Wheaton Precious Metals™
Corp. ("Wheaton" or the "Company") (TSX | NYSE | LSE: WPM), Wheaton Precious
Metals International Ltd. ("Wheaton International") and Vale Base Metals
Limited ("VBM") (NYSE:VALE) are pleased to announce the successful completion
of the throughput test for the first phase of the Salobo III expansion
project, a significant milestone that demonstrates increased reliability and
continued strong performance at VBM's flagship copper project in Brazil. The
test required VBM's Salobo complex to run at an average annualized throughput
of 32 million tonnes per annum ("Mtpa") for a period of 90 days. VBM confirmed
completion of the test on November 17, 2023, with an average throughput of
32.3 Mtpa.

 

"As a cornerstone asset in Wheaton's portfolio, Salobo is once again proving
itself to be a top-tier operation. The ramp-up of the expansion at the Salobo
Mine has not only met but surpassed our expectations, and we extend our
sincere congratulations to the Vale Base Metals team in achieving this
significant milestone," said Randy Smallwood, President and Chief Executive
Officer of Wheaton. "An accomplishment of this magnitude is made possible by
the dedication of the on-site team and their commitment to operational
excellence. These efforts have resulted in significant enhancements to both
Salobo's reliability and operational performance, and we continue to forecast
meaningful production from Salobo over the next several years. As the
expansion project advances, we look forward to our continued partnership with
Vale Base Metals as they embark on this exciting next phase of growth."

 

"This is a great accomplishment for the Salobo teams and our entire
organization," said VBM Chief Executive Officer Deshnee Naidoo. "The
consistent performance at Salobo shows we are taking the right actions to
unlock value across the portfolio with a focus on driving efficiency and
operational excellence. Salobo III is a US$1.1 billion investment in our
future that leverages our unique exposure to a Tier 1 copper hub in the
Carajás region - a distinct competitive advantage and growth engine as we
look to accelerate copper production and deliver critical minerals the world
needs."

 

Salobo - Mill Throughput Expansion

The Salobo mine historically had a mill throughput capacity of 24 Mtpa, and
having now exceeded throughput capacity of 32 Mtpa, is currently ramping up to
full capacity of 36 Mtpa, expected in the fourth quarter of 2024. Under the
terms of the Salobo precious metals purchase agreement ("PMPA"), Wheaton
International will make a payment to Vale Base Metals totalling $370 million
for completion of the first phase of the Salobo III expansion project. The
remaining balance of the expansion payment is dependent on the timing of
completion and will be triggered once Vale Base Metals expands actual
throughput above 35 Mtpa for a period of 90 days. In addition, Wheaton
International will be required to make annual payments of between $5.1 million
to $8.5 million for a 10-year period following payment of the expansion
payments if the Salobo mine implements a high-grade mine plan.

 

Financing the Expansion Payment

As at September 30, 2023, the Company had approximately $834 million of cash
on hand, which when combined with the liquidity provided by the available
credit under the $2 billion revolving term loan and the strength of our
ongoing operating cash flows, positions the Company well to fund the Salobo
expansion payment in addition to the recently announced acquisition of the
Platreef, Kudz Ze Kayah and Curraghinalt streams, as well as all outstanding
commitments and known contingencies, and provides flexibility to acquire
additional accretive mineral stream interests.

 

About Wheaton Precious Metals Corp.

Wheaton is the world's premier precious metals streaming company with the
highest-quality portfolio of long-life, low-cost assets. Its business model
offers investors commodity price leverage and exploration upside but with a
much lower risk profile than a traditional mining company. Wheaton delivers
amongst the highest cash operating margins in the mining industry, allowing it
to pay a competitive dividend and continue to grow through accretive
acquisitions. As a result, Wheaton has consistently outperformed gold and
silver, as well as other mining investments. Wheaton is committed to strong
ESG practices and giving back to the communities where Wheaton and its mining
partners operate. Wheaton creates sustainable value through streaming for all
of its stakeholders.

 

About Vale Base Metals

Vale Base Metals, the holding entity for Vale's energy transition metals
business, is one of the world's largest producers of high-quality nickel and
an important producer of copper and responsibly sourced cobalt. With a
corporate presence in Toronto, Canada, and operations in Newfoundland &
Labrador, Ontario, Manitoba, Indonesia, Brazil, the UK and Japan, the business
delivers critical building blocks for a cleaner, greener future.

 

 

For further information:

 

Investor Contact

Emma Murray

Vice President, Investor Relations

Tel: 1-844-288-9878

Email: info@wheatonpm.com (mailto:info@wheatonpm.com)

 

Media Contact

Simona Antolak

Vice President, Communications & Corporate Affairs

Tel: 604-639-9870

Email: simona.antolak@wheatonpm.com (mailto:simona.antolak@wheatonpm.com)

 

Vale Media

Media.valebasemetals@vale.com

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 PMPA counterparties. Forward-looking statements,
which are all statements other than statements of historical fact, include,
but are not limited to, statements with respect to payments to Vale Base
Metals in connection with the Salobo III expansion,  the satisfaction of each
party's obligations in accordance with the Salobo PMPA and the receipt of
additional gold production in respect of the Salobo III expansion, the future
price of commodities, the estimation of future production from 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, the commencement, timing and
achievement of construction, expansion or improvement projects by Wheaton's
PMPA counterparties at mineral stream interests owned by Wheaton (the "Mining
Operations"), the payment of upfront cash consideration to counterparties
under PMPAs, the satisfaction of each party's obligations in accordance with
PMPAs and royalty arrangements and the receipt by the Company of precious
metals and cobalt production in respect of the applicable Mining Operations
under PMPAs or other payments under royalty arrangements, the ability of
Wheaton's PMPA counterparties to comply with the terms of a PMPA (including as
a result of the business, mining operations and performance of Wheaton's PMPA
counterparties) and the potential impacts of such on Wheaton, future payments
by the Company in accordance with PMPAs, the costs of future production, the
estimation of produced but not yet delivered ounces, the impact of epidemics
(including the COVID-19 virus pandemic), including the potential heightening
of other risks, future sales of common shares under the ATM program, continued
listing of the Company's common shares, any statements as to future dividends,
the ability to fund outstanding commitments and the ability to continue to
acquire accretive PMPAs, including any acceleration of payments, projected
increases to Wheaton's production and cash flow profile, projected changes to
Wheaton's production mix, the ability of Wheaton's PMPA counterparties to
comply with the terms of any other obligations under agreements with the
Company, the ability to sell precious metals and cobalt production, confidence
in the Company's business structure, the Company's assessment of taxes payable
and the impact of the CRA Settlement, possible domestic audits for taxation
years subsequent to 2016 and international audits, the Company's assessment of
the impact of any tax reassessments, the Company's intention to file future
tax returns in a manner consistent with the CRA Settlement, the Company's
climate change and environmental commitments, and assessments of the impact
and resolution of various legal and tax matters, including but not limited to
audits. 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 related to the
satisfaction of each party's obligations in accordance with the terms of the
Salobo PMPA, the satisfaction of each party's obligations in accordance with
the terms of the Company's PMPAs or royalty arrangements, risks associated
with fluctuations in the price of commodities (including Wheaton's ability to
sell its precious metals or cobalt production at acceptable prices or at all),
risks related to 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), the absence of control
over the Mining Operations and having to rely on the accuracy of the public
disclosure and other information Wheaton receives from the Mining Operations,
uncertainty in the estimation of production from Mining Operations,
uncertainty in the accuracy of mineral reserve and mineral resource
estimation, risks of significant impacts on Wheaton or the Mining Operations
as a result of an epidemic (including the COVID-19 virus pandemic), the
ability of each party to satisfy their obligations in accordance with the
terms of the PMPAs, the estimation of future production from Mining
Operations, Wheaton's interpretation of, compliance with or application of,
tax laws and regulations or accounting policies and rules being found to be
incorrect, any challenge or reassessment by the CRA of the Company's tax
filings being successful and the potential negative impact to the Company's
previous and future tax filings, assessing the impact of the CRA Settlement
(including whether there will be any material change in the Company's facts or
change in law or jurisprudence), potential amendments to Canada's transfer
pricing rules under the Income Tax Act (Canada) that may result from the
Department of Finance's consultation paper released June 6, 2023,  potential
implementation of a 15% global minimum tax, including the draft legislation
issued for consultation by the Canadian Federal Government on August 4, 2023
that would apply to the income of the Company's non-Canadian subsidiaries;
counterparty credit and liquidity, mine operator concentration, indebtedness
and guarantees, hedging, competition, claims and legal proceedings against
Wheaton or the Mining Operations, security over underlying assets,
governmental regulations, international operations of Wheaton and the Mining
Operations, exploration, development, operations, expansions and improvements
at the Mining Operations, environmental regulations, climate change, Wheaton
and the Mining Operations ability to obtain and maintain necessary licenses,
permits, approvals and rulings, Wheaton and the Mining Operations ability to
comply with applicable laws, regulations and permitting requirements, lack of
suitable supplies, infrastructure and employees to support the Mining
Operations, inability to replace and expand mineral reserves, including
anticipated timing of the commencement of production by certain Mining
Operations (including increases in production, estimated grades and
recoveries), uncertainties of title and indigenous rights with respect to the
Mining Operations, environmental, social and governance matters, Wheaton and
the Mining Operations ability to obtain adequate financing, the Mining
Operations ability to complete permitting, construction, development and
expansion, global financial conditions, Wheaton's acquisition strategy 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.sedarplus.ca and Wheaton's Form 40-F for the year ended December 31, 2022
on file with the U.S. Securities and Exchange Commission on EDGAR (the
"Disclosure"). Forward-looking statements are based on assumptions management
currently believes to be reasonable, including (without limitation): the
payments to Vale Base Metals and the satisfaction of each party's obligations
in accordance with the terms of the Salobo 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 reserves and mineral resource estimates from
Mining Operations (including reserve conversion rates) are accurate, that each
party will satisfy their obligations in accordance with the PMPAs, that
Wheaton will continue to be able to fund or obtain funding for outstanding
commitments, that Wheaton will be able to source and obtain accretive PMPAs,
that neither Wheaton nor the Mining Operations will suffer significant impacts
as a result of an epidemic (including the COVID-19 virus pandemic), that any
outbreak or threat of an outbreak of a virus or other contagions or epidemic
disease will be adequately responded to locally, nationally, regionally and
internationally, without such response requiring any prolonged closure of the
Mining Operations or having other material adverse effects on the Company and
counterparties to its PMPAs, that the trading of the Company's common shares
will not be adversely affected by the differences in liquidity, settlement and
clearing systems as a result of multiple listings of the Common Shares on the
LSE, the TSX and the NYSE, that the trading of the Company's common shares
will not be suspended, and that the net proceeds of sales of common shares, if
any, will be used as anticipated, that expectations regarding the resolution
of legal and tax matters will be achieved (including ongoing CRA audits
involving the Company), that Wheaton has properly considered the
interpretation and application of Canadian tax law to its structure and
operations, that Wheaton has filed its tax returns and paid applicable taxes
in compliance with Canadian tax law, that Wheaton's application of the CRA
Settlement is accurate (including the Company's assessment that there will be
no material change in the Company's facts or change in law or jurisprudence),
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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