Wheaton Precious Metals secures $500 million Sibanye Stillwater PGM stream agreement
A precious metal streaming company has acquired a new stream on a lucrative US based PGM producer.
Wheaton Precious Metals announced in a statement this week that it had acquired a gold and palladium stream from Sibanye Gold Limited (Sibanye Stillwater), with relation to production from its Stillwater and East Boulder mines, known collectively as Stillwater.
The stream deal will see Wheaton pay Sibanye-Stillwater an upfront cash consideration of $500 million for an amount of gold equal to 100% of the Stillwater gold production for the life of mine.
With regards to palladium, Wheaton will receive an initial amount equal to 4.5% of Stillwater production, which will then decrease to 2.25% and then 1% based on defined delivery thresholds.
Upon the closing of the deal, Wheaton will have see an increase of estimated Proven and Probable gold reserves by 410 koz (with Inferred gold resources increasing by 920 koz) and Proven and Probable palladium reserves of 610 Koz (with Inferred palladium resources of 430 koz).
"Stillwater is another accretive addition to Wheaton's portfolio of assets that is expected to contribute both production and cash flow for decades to come," said Randy Smallwood, Wheaton's President and Chief Executive Officer.
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"What mainly attracted us to this opportunity was the quality and size of the J-M Reef deposit, coupled with the ongoing expansion at the Blitz Project. There are over 12 kilometres of undeveloped mineralization associated with the J-M Reef between the two currently producing mines. With a mine life extending well into the foreseeable future, we believe Stillwater will be one of Wheaton's foundational assets for many years to come. Finally, the acquisition will be funded through our current revolving credit facility, which we are comfortable utilizing given our industry leading cash flow."
