Wheaton Precious Metals Announces New Precious Metals Purchase Agreement With First Majestic in Conjunction With Primero's Sale of the San Dimas Mine

Wheaton Precious Metals Announces New Precious Metals Purchase Agreement With First Majestic in Conjunction With Primero's Sale of the San Dimas Mine

PR Newswire

VANCOUVER, British Columbia, January 12, 2018

VANCOUVER, British Columbia, January 12, 2018 /PRNewswire/ --

Wheaton Precious Metals™ Corp. ("Wheaton" or the "Company") announces that its wholly owned subsidiary Wheaton Precious Metals International Ltd. ("Wheaton International") has agreed to a new precious metals purchase agreement (the "First Majestic PMPA") relating to the San Dimas mine, in conjunction with the proposed transaction announced today under which First Majestic Silver Corp. ("First Majestic") will acquire Primero Mining Corp. ("Primero") pursuant to a plan of arrangement (the "Arrangement").

Wheaton International has agreed to terminate the existing San Dimas silver purchase agreement with Primero (the "Existing SPA") and enter into the First Majestic PMPA, which includes the following terms:

As part of the transaction, in addition to the new stream Wheaton International will receive 20,914,590 First Majestic common shares reflecting an aggregate value of US$151 million3 (the "First Majestic Shares").

"San Dimas has operated for over 130 years and is the mine Wheaton was founded on in 2004. With the new streaming arrangement being linked to a combination of gold and silver production, we believe San Dimas will continue to deliver significant value to Wheaton for many years to come while also providing economic and social opportunities to the community of Tayoltita," said Randy Smallwood, President and Chief Executive Officer of Wheaton. "First Majestic has a long history of operating in Mexico and an expertise in mining narrow vein underground deposits similar to San Dimas. Given their experience and a renewed focus on mining the entire deposit, including the silver rich areas, we are excited to welcome First Majestic as a partner."

The termination of the Existing SPA and the effectiveness of the First Majestic PMPA remain subject to a number of conditions, including completion of the Arrangement. The First Majestic Shares will represent approximately 11% of First Majestic's current issued and outstanding shares and will be subject to a six month hold period (subject to certain exceptions) with volume selling restrictions thereafter.

In addition, at the time of closing of the Arrangement, Wheaton International has agreed to release the guarantee previously provided by Goldcorp Inc. ("Goldcorp") under the Existing SPA in consideration for a payment of US$10 million from Goldcorp to Wheaton International. Furthermore, the US$0.50 per ounce penalty for each ounce less than 215 million ounces delivered by 2031 will be extinguished.

In order to facilitate the closing of the Arrangement, Wheaton also announces that it has agreed to extend the guarantee previously provided by Wheaton and certain of its subsidiaries under Primero's existing revolving credit facility to the earlier of April 30, 2018, and the completion or termination of the Arrangement.

Impact to Wheaton Precious Metals
The silver stream on San Dimas represented on average approximately 10% of Wheaton's total historical production over the past three years at approximately 5.4 million silver ounces per year. Under the First Majestic PMPA, San Dimas is expected to contribute on average approximately 40,000 to 45,000 ounces of gold production4  annually to Wheaton's total production over the next five years. The Company will update its five-year average annual guidance for both silver and gold when it releases its fourth quarter and full year results for 2017. 

Mineral Reserves and Resources will be updated under due course in the first half of 2018 and include any changes due to the amendments to the stream subject to the successful closing of the Arrangement.

Advisors and Counsel
BMO Capital Markets acted as financial advisor and Cassels Brock & Blackwell LLP and Goodmans LLP acted as legal counsel to Wheaton.

   End Notes
    1 If the average gold to silver price ratio decreases to less than 50:1 or increases to more than 90:1 for a period of 6 months or more, then the "70" shall be revised to "50" or "90", as the case may be, until such time as the average gold to silver price
    ratio is between 50:1 to 90:1 for a period of 6 months or more in which event the "70" shall be reinstated.
    2 Wheaton has a right of first refusal on certain areas outside of the current area of interest. In addition, to the extent ore from certain areas outside of the current area of interest is processed through the San Dimas' mill, such ore will be subject to
    the stream.
    3 Number of First Majestic Shares is based on the 20-day volume weighted average price of the First Majestic common shares ending as of January 10, 2018, which common shares will be issuable upon termination of the Existing SPA.
    4 Gold production is based on a silver / gold ratio of 70:1.

CAUTIONARY NOTE REGARDING FORWARD LOOKING-STATEMENTS 

The information contained herein contains "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking statements, which are all statements other than statements of historical fact, include, but are not limited to, statements with respect to:

Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "projects", "intends", "anticipates" or "does not anticipate", or "believes", "potential", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Wheaton Precious Metals to be materially different from those expressed or implied by such forward-looking statements, including but not limited to:

Forward-looking statements are based on assumptions management currently believes to be reasonable, including but not limited to:

Although Wheaton Precious Metals has attempted to identify important factors that could cause actual results, level of activity, performance or achievements to differ materially from those contained in forward-looking statements, there may be other factors that cause results, level of activity, performance or achievements not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate and even if events or results described in the forward-looking statements are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on, Wheaton Precious Metals. Accordingly, readers should not place undue reliance on forward-looking statements and are cautioned that actual outcomes may vary. The forward-looking statements included herein are for the purpose of providing investors with information to assist them in understanding Wheaton Precious Metals' expected financial and operational performance and may not be appropriate for other purposes. Any forward looking statement speaks only as of the date on which it is made. Wheaton Precious Metals does not undertake to update any forward-looking statements that are included or incorporated by reference herein, except in accordance with applicable securities laws.

Contact:
Patrick Drouin
Senior Vice President
Investor Relations
Wheaton Precious Metals Corp.
Tel: +1-844-288-9878
Email: info@wheatonpm.com

Website: www.wheatonpm.com

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