Wheaton announces acquisition of gold stream from Capstone – Global Mining Review



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Wheaton Precious Metals™ Corp. has announced that its wholly-owned subsidiary, Wheaton Precious Metals International Ltd., has entered into a definitive precious metal purchase agreement with Capstone Mining Corp. in respect to the Santo Domingo project located in the Atacama Region, Chile.

Upon closing, Wheaton International will purchase 100% of the payable gold production until 285 000 oz have been delivered, thereafter dropping to 67% of payable gold production for the life of the mine. Wheaton International will pay Capstone a total upfront cash consideration of US$290 million, US$30 million of which is payable upon closing and the remainder of which is payable during construction of the Santo Domingo project, subject to customary conditions being satisfied, including Capstone attaining sufficient financing to cover total expected capital expenditures. In addition, Wheaton will make ongoing payments for gold ounces delivered equal to 18% of the spot gold price.

“Santo Domingo is an exceptional project that provides Wheaton with an additional near-term growth opportunity. The project is forecast to be a first-quartile copper producer with a long mine life, making it an ideal fit for Wheaton’s existing high-quality portfolio,” said Randy Smallwood, Wheaton’s President and Chief Executive Officer. “We are very excited to further build our partnership with Capstone and look forward to seeing Santo Domingo developed into a top-tier copper mine.”

Transaction highlights

  • The Santo Domingo project is forecast to be a first quartile copper mine with an 18 year mine life.
  • Attributable gold production is forecast to average 35 000 to 40 000 oz per year for the first five full years of production and 25 000 to 30 000 oz for the first 10 full years.
  • Capstone expects major construction to commence in late 2021 with the first full year of production forecast for 2024.
  • Subsequent to the closing of this acquisition, the addition of the Santo Domingo project will increase Wheaton’s estimated proven and probable gold reserves by 0.51 million oz, measured and indicated gold resources by 0.12 million oz, and inferred gold resources by 0.03 million oz.
  • Exploration upside potential exists as no exploration drilling has been completed since Capstone acquired the Santo Domingo project in 2011.
  • Wheaton International has agreed to provide Capstone with an early deposit of US$30 million, which will be used to repay the funds paid by Capstone to acquire the remaining 30% of the Santo Domingo project.

 

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