Wheaton to add South African PGMs, gold streams to its portfolio

Royalty and streaming group Wheaton Precious Metals and its subsidiary Wheaton Precious Metals International (Wheaton International) have entered into a definitive agreement with certain entities advised by Orion Resource Partners to acquire existing streams in respect of Ivanhoe Mines’ Platreef platinum group metals (PGMs)/nickel/copper/gold project, in South Africa, and BMC Minerals’ Kudz ze Kayah gold/silver project, in Canada.

Wheaton International has also entered into a new precious metals purchase agreement for a gold stream in respect of Dalradian Gold’s Curraghinalt project, in Northern Ireland.

“The acquisition of these diverse, high-quality streams fits seamlessly into our portfolio of high-margin, low-cost assets, with near-term production from Platreef significantly adding to our already robust growth profile.

“[Platreef] has been significantly de-risked, given the advancement of construction and development and is forecast to deliver significant precious metals production to Wheaton, commencing next year. We are also very impressed with Ivanhoe’s progress in working with the community and other stakeholders as it rapidly advances the project towards production,” says Wheaton president and CEO Randy Smallwood.

The acquisition of all three streams is expected to be concluded later this year or early in 2024 and Wheaton will pay up to $530-million for the three streams.

This includes the payment to Orion of $450-million on the closing of the acquisition of the Platreef and Kudz Ze Kayah streams, along with an additional $5-million contingency payment in respect of the Kudz Ze Kayah stream.

Further, $20-million will be paid to an affiliate of Dalradian as an early deposit for the Curraghinalt stream and $55-million will be paid during construction of the Curraghinalt project, subject to various customary conditions being satisfied.

PLATREEF
The Platreef project, in South Africa’s Limpopo province, is fully permitted and under construction, with commercial production expected to start in the fourth quarter of 2024.

Under the terms of the Platreef project gold stream agreement, Wheaton International will be entitled to buy 62.5% of the payable gold until a total of 218 750 oz has been delivered to it.

It will then be entitled to buy 50% of the payable gold production until a total of 428 300 oz has been delivered to it and, thereafter, to buy 3.125% of the payable gold production if certain conditions are met.

Wheaton International will pay $100/oz of gold up to the delivery of 428 300 oz. The price will then increase to 80% of the spot price of gold thereafter.

Under the terms of a palladium and platinum stream agreement over Platreef, Wheaton International will buy 5.25% of the payable palladium and platinum until a total of 350 000 oz of combined palladium and platinum have been received, at which point the stream will be reduced to 3% of the payable palladium and platinum production until 485 115 oz have been delivered.

The stream will then be reduced to 0.1% of the payable palladium and platinum production if certain conditions are met.

Wheaton International will make ongoing payments for the palladium and platinum ounces delivered equal to 30% of the respective spot prices until 485 115 oz have been received.

Payment will then increase to 80% of the spot price of palladium and platinum.

KUDZ ZE KAYAH
The Kudz Ze Kayah gold/silver project is located in south central Yukon, Canada.

Under the Kudz Ze Kayah streams and, dependent on the timing of deliveries, Wheaton will be entitled to buy staged percentages of payable gold and payable silver ranging from 6.875% to 7.375% until 330 000 oz of gold and 43.3-million ounces of silver are produced and delivered.

That will reduce to a range of 5.625% to 6.125% until a further 59 800 oz of gold and 7.96-million ounces of silver are produced and delivered and, thereafter, to a range of 5% to 5.5% until a further 270 200 oz of gold and 35.34-million ounces of silver are produced and delivered.

Wheaton will make ongoing payments for the gold and silver ounces delivered equal to 20% of the spot gold and silver price.

CURRAGHINALT
The Curraghinalt project is located about 115 km west of Belfast, in Northern Ireland, and is in the final stages of the permitting process. A two-year construction period is expected to start in 2025.

Under the Curraghinalt stream, Wheaton International will buy 3.05% of the payable gold until 125 000 oz of gold have been delivered, at which point the stream will be reduced to 1.5% of the payable gold production for the life-of-mine.

It will make ongoing payments for the gold ounces delivered equal to 18% of the spot price of gold until the uncredited deposit is reduced to nil and 22% of the spot price of gold thereafter.