Silver Wheaton buys into early-stage project purchase agreement

JOHANNESBURG (miningweekly.com) – Dual-listed Silver Wheaton has signed a nonbinding term sheet with Panoro Minerals and its wholly owned subsidiary Cordillera Copper to enter into an early deposit precious metals purchase agreement for the Peru-based copper-gold-silver Cotabambas project.

The agreement would allow Silver Wheaton, which would provide Panoro with multiyear support and liquidity, to “get a foot in the door” on an early-stage project and position itself for the next cycle in base metals, said Silver Wheaton president and CEO Randy Smallwood in a statement on Thursday.

“This is a project that we believe will grow significantly with continued exploration of the currently defined targets and one that will be a part of the next wave of copper assets to be developed,” he added.

The deal would entitle Silver Wheaton to acquire 100% of the silver and 25% of the gold production from the Cotabambas project up to 90-million silver equivalent ounces, thereafter 66.67% of silver and 16.67% of gold production for the life-of-mine would be attributable to the Canadian miner.

Silver Wheaton would pay $140-million over nine years, plus an ongoing production payment of $5.90/oz of silver and $450/oz of gold or the respective prevailing market price, whichever was less.

About $14-million would be advanced to Panoro following the conclusion of certain conditions.

The balance would start filtering through following the delivery of a bankable definitive feasibility study, an environmental study and impact assessment and other related documents as well as the receipt of permits and construction commencing.

The company could also elect to terminate the agreement, and would be entitled to the return of about $12-million of the initial advance.

The agreement remained subject to the negotiation and completion of definitive documentation.