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Wheaton Precious Metals™ Corp. (“Wheaton” or the “Company”) is announcing that it has entered into a definitive agreement with certain subsidiaries of Glencore plc to terminate its silver stream on the Yauliyacu Mine in Peru for a cash payment of US$150 million, less the aggregate value of any deliveries to Wheaton of silver produced in 2022 prior to closing. Wheaton has agreed to terminate the stream in order to help facilitate the sale by Glencore of the Yauliyacu Mine.
“Yauliyacu has been part of Wheaton’s portfolio since 2006 and has been integral to the history of our company. Combined with San Dimas and Zinkgruvan, Yauliyacu gave us the scale to grow the streaming business and become the company we are today,” said Randy Smallwood, Wheaton’s President and Chief Executive Officer. “Consistent with a core principle of working with our partners, Wheaton has agreed to terminate the stream, adding even more financial capacity to explore new opportunities that we believe are in the best interests of our shareholders. Glencore was one of the first mining companies to recognize the value that is created for all stakeholders through the streaming model, and we thank them for their stewardship of this project and look forward to maintaining our strong partnership on existing and potential future developments.”
Wheaton acquired the silver stream on the Yauliyacu Mine in 2006 for an upfront consideration of US$285 million and has subsequently generated over US$485 million in cash flow from the stream. Combined with the termination payment, Wheaton will have generated an absolute return of over 220% of the original investment.
The closing of the transaction is contingent on Glencore divesting the Yauliyacu mine by December 31, 20221 and is subject to other customary conditions.
As a result of the transaction, Wheaton now expects average annual production for the five-year period ending December 31, 2026, to be approximately 800,000 gold equivalent ounces2 (“GEOs”) (from 820,000 previously) and for the ten-year period ending December 31, 2031, to be approximately 850,000 GEOs (from 870,000 previously). Production in 2022 is expected to remain between 640,000 and 680,000 GEOs.
