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Wheaton Precious Metals Announces the Acquisition of Existing Streams from Orion Mine Finance Including the Platreef and Kudz Ze Kayah Projects, and Enters into a New Stream on the Curraghinalt Project

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Wheaton Precious Metals Announces the Acquisition of Existing Streams from Orion Mine Finance Including the Platreef and Kudz Ze Kayah Projects, and Enters into a New Stream on the Curraghinalt Project

 

 

 

 

 

Wheaton Precious Metals™ Corp. is pleased to announce Wheaton and its wholly-owned subsidiary, Wheaton Precious Metals International Ltd. have entered into a definitive agreement with certain entities advised by Orion Resource Partners to acquire existing streams in respect of Ivanhoe Mines’ Platreef Project and BMC Minerals’ Kudz Ze Kayah Project. In addition, Wheaton International has entered into a new precious metals purchase agreement for a gold stream in respect of Dalradian Gold’s Curraghinalt Project.

 

“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,” said Randy Smallwood, Wheaton’s President and Chief Executive Officer. “This Project 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.”

 

Closing of the acquisition of the Platreef, Kudz Ze Kayah and Curraghinalt Streams is subject to typical terms and conditions and anticipated to occur within the fourth quarter of 2023 or early first quarter of 2024.

 

Transaction Details

 

(All values in US$ unless otherwise noted)

  • Consideration: Wheaton and Wheaton International will pay up to a total upfront cash consideration of $530 million as follows:
    • $450 million will be paid to Orion on the closing of the acquisition of the Platreef Streams and Kudz Ze Kayah Streams, with an additional $5 million contingency payment in respect of the Kudz Ze Kayah Stream; and
    • $20 million will be paid to an affiliate of Dalradian Gold on an early deposit basis relative to the Curraghinalt Stream, with an additional $55 million being paid during construction of the Curraghinalt Project, subject to various customary conditions being satisfied.

 

Platreef Project (majority owned by Ivanhoe Mines, the “Platreef Streams”)

  • Location: Located approximately 280 kilometres north-east of Johannesburg, in the Limpopo province of South Africa
  • Streamed Metals:
    • Under the Platreef Project gold stream agreement, Wheaton International will be entitled to purchase 62.5% of the payable gold until a total of 218,750 ounces (“oz”) of gold has been delivered to Wheaton International under the gold stream1, at which point Wheaton International will be entitled to purchase 50% of the payable gold production until a total of 428,300 oz of gold has been delivered to Wheaton International under the gold stream, at which point Wheaton International will be entitled to purchase 3.125% of the payable gold production if certain conditions are met.
    • In addition, under the Platreef Project palladium and platinum streams agreement, Wheaton International will purchase 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 3.0% of the payable palladium and platinum production until 485,115 oz have been delivered, at which point the stream will be reduced to 0.1% of the payable palladium and platinum production if certain conditions are met.
  • Production Profile2: Attributable production is forecast to average over 13,000 oz of gold and 8,500 oz of each of palladium and platinum per year for the first ten years of production, increasing to over 24,000 oz of gold and 13,500 oz of each palladium and platinum per year for the following ten years of production.
  • Production Payments:
    • Under the Platreef Project gold stream agreement, Wheaton International will make ongoing payments for the gold ounces delivered equal to $100/oz until a total of 428,300 oz of gold have been delivered under the gold stream, increasing to 80% of the spot price of gold thereafter.
    • Under the Platreef Project palladium and platinum streams agreement, Wheaton International will make ongoing payments for the palladium and platinum ounces delivered equal to 30% of the respective spot prices until 485,115 combined ounces have been received, increasing to 80% of the spot price of palladium and platinum thereafter.
  • Incremental Reserves and Resources2:
    • The addition of the Platreef gold stream will increase Wheaton’s total estimated Proven and Probable gold reserves by 0.67 million ounces (“Moz”), Measured and Indicated gold resources by 0.07 Moz, and Inferred gold resources by 0.13 Moz.
    • The addition of the Platreef palladium stream will increase Wheaton’s total estimated Proven and Probable palladium reserves by 0.35 Moz, Measured and Indicated palladium resources by 0.01 Moz, and Inferred palladium resources by 0.02 Moz.
    • The addition of the Platreef platinum stream will increase Wheaton’s total estimated Proven and Probable platinum reserves by 0.34 Moz, Measured and Indicated platinum resources by 0.01 Moz, and Inferred platinum resources by 0.02 Moz.
  • Other Considerations:
    • The Platreef Project is fully permitted and currently under construction, with commercial production expected in Q4 2024.
    • Sustainability Considerations:
      • Ivanhoe signed an offtake agreement with the Mogalakwena Local Municipality (MLM) to provide local, treated water to supply the bulk water needed for Platreef’s construction and operations. Recycling locally treated water is a cost-effective and sustainable approach to securing water for the mine’s production.
      • In conformance with South Africa’s mining laws, the ownership structure at the Platreef Project includes a 26% interest transferred to a B-BBEE special purpose vehicle, comprised of 3% local non-managerial employees, 3% local entrepreneurs and 20% in a trust established for the benefit of the 20 communities that surround the Platreef Project area (The Bonega Communities Trust).
      • The site has secured options to use electricity generated from renewable energy and liquefied natural gas, providing a reliable source of energy with fewer carbon dioxide emissions than South Africa’s coal-fired national electrical grid.
    • The Platreef Streams provide certain corporate guarantees and security over assets of the Platreef Project until certain conditions are met.

 

Kudz Ze Kayah Project (owned by BMC Minerals, the “Kudz Ze Kayah Streams”)

  • Location: Located in the northern Pelly Mountains, 115 km southeast of the Ross River in south central Yukon, Canada.
  • Streamed Metals: Under the Kudz Ze Kayah Streams and dependent on the timing of deliveries, the Company will be entitled to purchase: staged percentages of payable gold and payable silver ranging from 6.875% to 7.375% until 330,000 oz of gold and 43,300,000 oz of silver are produced and delivered, reducing to a range of 5.625% to 6.125% until a further 59,800 oz of gold and 7,958,000 oz of silver are produced and delivered, further reducing to a range of 5.000% to 5.500% until a further 270,200 oz of gold and 35,342,000 oz of silver are produced and delivered (for a total of 660,000 oz of gold and 86,600,000 oz of silver), and thereafter ranging between 6.25% and 6.75%.
  • Production Profile2: Life of mine annual attributable production is forecast to average approximately 1,700 oz of gold and 230,000 oz of silver.
  • Production Payments: Wheaton will make ongoing payments for the gold and silver ounces delivered equal to 20% of the spot gold and silver price.

 

Incremental Reserves and Resources2:

    • The addition of the Kudz Ze Kayah gold stream will increase Wheaton’s total estimated Proven and Probable gold reserves by 0.05 Moz, Measured and Indicated gold resources by 0.01 Moz, and Inferred gold resources by 0.002 Moz.
    • The addition of the Kudz Ze Kayah silver stream will increase Wheaton’s total estimated Proven and Probable silver reserves by 5.0 Moz, Measured and Indicated silver resources by 1.4 Moz, and Inferred silver resources by 0.2 Moz.
  • Permitting Status:
    • The project received approval from the Yukon Environment and Socio-economic Assessment Board (“YESAB”) in June 2022. Two provincial permits are outstanding being the water mining license and the quartz mining license.
    • Wheaton has agreed to pay to Orion an additional $5 million contingency payment if certain conditions are achieved.
    • There is an ongoing lawsuit between the Kaska Nation and the governments of Yukon and Canada over the government’s decision to approve the environmental and socio-economic assessment, with the Kaska Nation arguing the governments did not reasonably consult with First Nations. The Yukon Supreme Court heard the case in April 2023 and a judgment is expected by the end of 2023.
  • Other Considerations:
    • Under the existing Kudz Ze Kayah Stream, BMC Minerals has a buyback option to repurchase 50% of the gold and silver streams for a period of 30 days after June 22, 2026, for $36 million.
    • The Kudz Ze Kayah Streams provide certain corporate guarantees and security over assets of the Kudz Ze Kayah Project until certain conditions are met.

 

Curraghinalt Project (owned by Dalradian Gold Limited, the “Curraghinalt Stream”)

  • Location: Located approximately 115 km west of Belfast, in Northern Ireland, United Kingdom.
  • Streamed Metal: Under the Curraghinalt Stream, Wheaton International will purchase 3.05% of the payable gold until 125,000 oz of gold has been delivered, at which point the stream will be reduced to 1.5% of the payable gold production for life of mine.
  • Production Profile2: Attributable production is forecast to average approximately 4,400 oz of gold per year for the first ten years of production, averaging approximately 3,200 oz of gold per year life of mine.
  • Production Payments: Wheaton International 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.
  • Incremental Reserves and Resources2: The addition of the Curraghinalt stream will increase Wheaton’s total estimated Proven and Probable gold reserves by 0.08 Moz and Inferred gold resources by 0.07 Moz.
  • Other Considerations:
    • The Curraghinalt Project is in the final stages of the permitting process, with the forecasted 2-year construction period anticipated to commence in 2025.
    • In the event of a change of control, Dalradian may purchase one-third of the Curraghinalt stream from Wheaton until the earlier of January 1, 2027, or first production.
    • Dalradian and certain of its subsidiaries will provide Wheaton International with corporate guarantees and certain other security over their assets.
    • Once the complete financing package has been finalized, the stream percentages will be subject to increases in the event that the existing stream held by Wheaton International is subordinated to debt.
    • Sustainability Considerations:
      • Dalradian has submitted a planning application detailing its approach to environmental protection and providing benefits to the local community.
      • The Curraghinalt mine design features a reverse osmosis water treatment plant, a dry stack tailings facility and a commitment to carbon neutrality (supported by a supply of 100% renewable electricity). Dalradian expects to hire 90% of its staff from the local area. This will be supported with an investment of £15 million towards a training program over the initial three years to assist local people to qualify for positions at the mine.

 

Financing the Transactions

 

As at September 30, 2023, the Company had approximately $834 million of cash on hand, which when combined with the liquidity provided by the available credit under the $2 billion revolving term loan and the strength of our ongoing operating cash flows, positions the Company well to fund the acquisition of the Platreef, Kudz Ze Kayah and Curraghinalt streams, as well as all outstanding commitments and known contingencies, and provides flexibility to acquire additional accretive mineral stream interests.

_____________________
2 Please refer to the Attributable Mineral Reserves & Mineral Resources table in this news release for full disclosure of reserves and resources associated with Platreef, Kudz Ze Kayah and Curraghinalt, including accompanying footnotes.

 

About Wheaton Precious Metals

 

Wheaton is the world’s premier precious metals streaming company with the highest-quality portfolio of long-life, low-cost assets. Its business model offers investors commodity price leverage and exploration upside but with a much lower risk profile than a traditional mining company. Wheaton delivers amongst the highest cash operating margins in the mining industry, allowing it to pay a competitive dividend and continue to grow through accretive acquisitions. As a result, Wheaton has consistently outperformed gold and silver, as well as other mining investments. Wheaton is committed to strong ESG practices and giving back to the communities where Wheaton and its mining partners operate. Wheaton creates sustainable value through streaming for all of its stakeholders.

 

About Orion

 

Orion is an $8.2 billion (as of June 30, 2023) global asset management firm that specializes in institutional investment strategies in precious and base metals and minerals, many of which are currently leveraged to stimulus and infrastructure spend and the push to decarbonize. Headquartered in NYC and with offices in Denver, London, and Sydney, Orion includes a team of 80 professionals with backgrounds in metals finance, physical metals logistics and sales, and in-house technical professionals responsible for risk assessment and portfolio management.

 

Attributable Gold Mineral Reserves and Mineral Resources – Platreef Project

 

Category Tonnage
Mt
Grade
Au g/t
Contained
Au Moz
Proven 0.0 0.00 0.00
Probable 69.8 0.30 0.67
P&P 69.8 0.30 0.67
Measured 0.0 0.00 0.00
Indicated 7.9 0.26 0.07
M&I 7.9 0.26 0.07
Inferred 15.8 0.26 0.13

 

Attributable Platinum & Palladium Mineral Reserves and Mineral Resources – Platreef Project

 

Category Tonnage Grade Contained
Mt Pt g/t Pd g/t Pt Moz Pd Moz
Proven 0.0 0.0 0.0 0.00 0.00
Probable 5.5 1.9 2.0 0.34 0.35
P&P 5.5 1.9 2.0 0.34 0.35
Measured 0.0 0.0 0.0 0.00 0.00
Indicated 0.3 1.5 1.5 0.01 0.01
M&I 0.3 1.5 1.5 0.01 0.01
Inferred 0.5 1.4 1.5 0.02 0.02
Notes on Platreef Project Mineral Reserves & Mineral Resources:
1. All Mineral Reserves and Mineral Resources have been estimated in accordance with the 2014 Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Standards for Mineral Resources and Mineral Reserves and National Instrument 43-101 – Standards for Disclosure for Mineral Projects (“NI 43-101”).
2. Mineral Reserves and Mineral Resources are reported above in millions of metric tonnes (“Mt”), grams per metric tonne (“g/t”) and millions of ounces (“Moz”).
3. Qualified persons (“QPs”), as defined by the NI 43-101, for the technical information contained in this document (including the Mineral Reserve and Mineral Resource estimates) are:
a. Neil Burns, M.Sc., P.Geo. (Vice President, Technical Services); and
b. Ryan Ulansky, M.A.Sc., P.Eng. (Vice President, Engineering), both employees of the Company (the “Company’s QPs”).
4. The Mineral Resources reported in the above tables are exclusive of Mineral Reserves. Ivanhoe report Mineral Resources inclusive of Mineral Reserves.  The Company’s QPs have made the exclusive Mineral Resource estimates for the mine based on average mine recoveries and dilution.
5. Mineral Resources, which are not Mineral Reserves, do not have demonstrated economic viability.
6. Platreef Project Mineral Reserves are reported as of January 26, 2022 and Mineral Resources as of January 28, 2022.
7. Platreef Project Mineral Reserves are reported above declining NSR cut-offs of between $155 and $80 per tonne assuming $1,600 per ounce platinum, $815 per ounce palladium, $1,300 per ounce gold, $1,500 per ounce rhodium, $8.90 per pound nickel and $3,00 per pound copper.
8. Platreef Project Mineral Resources are reported above a 2.0 grams per tonne 3PE + Au (platinum, palladium, rhodium and gold) cut-off.
9. The Platreef PMPA provides that Ivanhoe will deliver gold equal to 62.5% of the payable gold production until 218,750 ounces of gold are delivered and 50% until 428,300 ounces of gold are delivered, then 3.125% thereafter if certain conditions are met, and 5.25% of the platinum and palladium until 350,000 ounces are delivered and 3.0% until 485,115 ounces are delivered, then 0.1% thereafter if certain conditions are met. Attributable gold reserves and resources have been calculated on the 62.5% / 50% / 3.125% basis and attributable platinum and palladium on the 5.25% / 3.0% / 0.1% basis.

 

Attributable Gold and Silver Mineral Reserves and Mineral Resources – Kudz Ze Kayah Project

 

Category Tonnage Grade Contained
Mt Au g/t Ag g/t Au Moz Ag Moz
Proven 0.0 0.00 0.0 0.00 0.0
Probable 1.1 1.32 137.5 0.05 5.0
P&P 1.1 1.32 137.5 0.05 5.0
Measured 0.0 0.00 0.0 0.00 0.0
Indicated 0.2 1.64 186.4 0.01 1.4
M&I 0.2 1.64 186.4 0.01 1.4
Inferred 0.04 1.18 143.4 0.002 0.2
Notes on Kudz Ze Kayah Project Mineral Reserves & Mineral Resources:
1. All Mineral Reserves and Mineral Resources have been estimated in accordance with the 2014 Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Standards for Mineral Resources and Mineral Reserves and National Instrument 43-101 – Standards for Disclosure for Mineral Projects (“NI 43-101”).
2. Mineral Reserves and Mineral Resources are reported above in millions of metric tonnes (“Mt”), grams per metric tonne (“g/t”) and millions of ounces (“Moz”).
3. Qualified persons (“QPs”), as defined by the NI 43-101, for the technical information contained in this document (including the Mineral Reserve and Mineral Resource estimates) are:
a. Neil Burns, M.Sc., P.Geo. (Vice President, Technical Services); and
b. Ryan Ulansky, M.A.Sc., P.Eng. (Vice President, Engineering), both employees of the Company (the “Company’s QPs”).
4. The Mineral Resources reported in the above tables are exclusive of Mineral Reserves. BMC report Mineral Resources inclusive of Mineral Reserves.  The Company’s QPs have made the exclusive Mineral Resource estimates for the mine based on average mine recoveries and dilution.
5. Mineral Resources, which are not Mineral Reserves, do not have demonstrated economic viability.
6. Kudz Ze Kayah Project Mineral Reserves are reported as of June 30, 2019 and Mineral Resources as of May 31, 2017.
7. Kudz Ze Kayah Project Mineral Reserves are reported above an NSR cut-off of CAD$29.30 per tonne for open pit and CAD$173.23 per tonne for underground.
8. Kudz Ze Kayah Project Mineral Resources are reported above an NSR cut-off of CAD$25 per tonne for open pit and CAD$95 per tonne for underground.
9. The Kudz Ze Kayah PMPA provides that BMC will deliver gold and silver at a range of percentages. The Company has assumed a later production start with gold and silver equal to 7.375% of the payable production until 24,338 ounces of gold and 3,193,375 ounces of silver are delivered, then 6.125% until 28,000 ounces of gold and 3,680,803 ounces of silver are delivered, then 5.5% until 42,861 ounces of gold and 5,624,613 ounces of silver are delivered and 6.75% thereafter for the life of the mine.   Attributable gold and silver reserves and resources have been calculated on the 7.375% / 6.125% / 5.5% / 6.75% basis.

 

Attributable Gold Mineral Reserves and Mineral Resources – Curraghinalt Project

 

Category Tonnage Grade Contained
Mt Au g/t Au Moz
Proven 0.002 9.14 0.001
Probable 0.37 6.43 0.08
P&P 0.37 6.45 0.08
Inferred 0.19 12.24 0.07
Notes on Curraghinalt Project Mineral Reserves & Mineral Resources:
1. All Mineral Reserves and Mineral Resources have been estimated in accordance with the 2014 Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Standards for Mineral Resources and Mineral Reserves and National Instrument 43-101 – Standards for Disclosure for Mineral Projects (“NI 43-101”).
2. Mineral Reserves and Mineral Resources are reported above in millions of metric tonnes (“Mt”), grams per metric tonne (“g/t”) and millions of ounces (“Moz”).
3. Qualified persons (“QPs”), as defined by the NI 43-101, for the technical information contained in this document (including the Mineral Reserve and Mineral Resource estimates) are:
a. Neil Burns, M.Sc., P.Geo. (Vice President, Technical Services); and
b. Ryan Ulansky, M.A.Sc., P.Eng. (Vice President, Engineering), both employees of the Company (the “Company’s QPs”).
4. The Mineral Resources reported in the above tables are exclusive of Mineral Reserves. Dalradian report Mineral Resources inclusive of Mineral Reserves.  The Company’s QPs have made the exclusive Mineral Resource estimates for the mine based on average mine recoveries and dilution.
5. Mineral Resources, which are not Mineral Reserves, do not have demonstrated economic viability.
6. Curraghinalt Project Mineral Reserves are reported as of February 25, 2022 and Mineral Resources as of May 10, 2018.
7. Curraghinalt Project Mineral Reserves are reported above a 3.0 grams per tonne gold cut-off.
8. Curraghinalt Project Mineral Resources are reported above a 5.0 grams per tonne gold cut-off.
9. The Curraghinalt PMPA provides that Dalradian will deliver gold equal to 3.05% of the payable gold production until 125,000 ounces of gold are delivered and 1.5% thereafter for the life of the mine.  Attributable gold reserves and resources have been calculated on the 3.05% / 1.5% basis.

 

Neil Burns, P.Geo., Vice President, Technical Services for Wheaton Precious Metals and Ryan Ulansky, P.Eng., Vice President, Engineering, are a “qualified person” as such term is defined under National Instrument 43-101, and have reviewed and approved the technical information disclosed in this news release (specifically Mr. Burns has reviewed mineral resource estimates and Mr. Ulansky has reviewed the mineral reserve estimates).

 

Posted November 16, 2023

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