Silver Wheaton closes Panoro early deposit precious metals deal

TORONTO (miningweekly.com) – TSX- and NYSE-listed Silver Wheaton has closed a deal with project developer Panoro Minerals for an early deposit precious metals purchase agreement on the Cotabambas copper/gold/silver project, in Peru.

Silver Wheaton has secured all of the silver and a quarter of the gold output 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 streaming firm.

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.

Panoro would have a one-time right to repurchase half of the precious metals stream until January 1, 2020.

COTABAMBAS PROJECT
According to the September 2015 updated preliminary economic assessment (PEA), the Cotabambas project had compliant indicated resources of 117.1-million tonnes at average grades of 0.42% copper, 0.23 g/t gold, and 2.74 g/t silver, comprising contained metal of 1.09-billion pounds of copper, 860 000 oz of gold and 10.3-million ounces of silver.

Inferred resources totalled 605.3-million tonnes at average grades of 0.31% copper, 0.17 g/t gold and 2.33 g/t silver, comprising contained metal of 4.16-billion pounds of copper, 3.38-million ounces of gold and 45.37-million ounces of silver.

The updated PEA envisioned that a nominal processing throughput of 80 000 t/d of oxide, mixed and sulphide mineralisation in a conventional copper porphyry flotation concentrator would produce about 270 000 t/y of copper, gold and silver concentrate with copper as the main payable metal.

Over the 17-year mine life, estimated payable metal would be about 2.6-billion pounds of copper, 1.6-million ounces of gold, and 17.3-million ounces of silver produced at a cash cost of $1.22/lb copper, net direct after secondary metal credits.

The early deposit agreement stood to benefit from significant exploration upside at Cotabambas, as areas surrounding the currently defined mineral resources existed within the Ccalla and Azulccacca deposits.

Silver Wheaton advised that significant exploration potential might exist within the Maria Jose target, immediately to the northeast of Ccalla and Azulccacca, as well as the Jean Louis target, located to the southwest. Further potential might exist on parallel trends within the Guaclle-Buenavista, Ccarayoc, Chuyllullo, Chaupec and Añarqui targets.