salobo.png
Operator: Vale
Location: Canada
Term of Stream: Life of Mine
Stream Parameters: 42.4% of the Voisey’s Bay mine cobalt production until the delivery of 31 million pounds of cobalt and 21.2% of cobalt production thereafter for the life of mine.
Upfront Consideration: US$390M
Primary Metal: Nickel

Project Overview

The Voisey’s Bay mine and concentrator is located on the north coast of Labrador, approximately 1,200 kilometres north of St. John’s, Newfoundland. Production began in 2005 and open pit mining is expected to continue until 2022. There will be a gradual transition from open pit to underground mining beginning in 2021.

In July 2015 Vale’s Board of Directors sanctioned the development of the underground deposits at Voisey’s Bay. The mine expansion project will focus on the development of two separate deposits, Reid Brook and Eastern Deeps. Once in operation, underground mining is expected to extend the life of the Voisey’s Bay operation until at least 2034. At peak production, the underground mines are expected to produce about 45,000 tonnes per year of nickel-in-concentrate which will be shipped to Vale’s processing facility in Long Harbour, Newfoundland for further processing into finished nickel. The mine also produces a copper concentrate which is shipped to third party smelters but does not contain payable cobalt.

The construction phase of the mine expansion began in 2016 and is expected to be completed in 2022. This will include the expansion of existing surface infrastructure at Voisey’s Bay for increased power generation capacity, additional permanent accommodations, offices, warehousing and maintenance shops. The water and sewage treatment facilities will also be upgraded.

The development of the underground mines, which is the largest segment of the construction program, requires the development of declines from surface to access the ore bodies, and the construction and installation of supporting infrastructure including underground crushing and conveying, paste / backfill plant, maintenance facilities and underground mine ventilation systems.

Vale has entered into a development agreement with the Government of Newfoundland and Labrador in respect of the development and construction of the underground mines, including commitments as to the timing of completion of those underground mines. In addition, as Voisey’s Bay is located in an area subject to land claims by both the Innu Nation and the Nunatsiavut Government, Vale has also entered into impacts and benefits agreements with both groups.

Cobalt Purchase Agreement

On June 11, 2018, Wheaton Precious Metals agreed to pay Vale upfront cash consideration of US$390 million for a fixed percentage of cobalt production from the Voisey’s Bay mine. Effective January 1, 2021, Wheaton will be entitled to receive from Vale an amount of cobalt equal to 42.4% of the Voisey’s Bay mine cobalt production until the delivery of 31 million pounds of cobalt and an amount of cobalt equal to 21.2% of cobalt production thereafter for the life of mine. In addition, Wheaton will make ongoing payments of 18% of the Metal Bulletin market price (“cobalt spot price”) per cobalt pound delivered .

i) Production payment is set at 18% of cobalt spot prices, increasing to 22% upon the balance of upfront consideration being reduced to zero.

More Information

For more information about Voisey’s Bay, please visit the following:

Voisey’s Bay Acquisition Presentation
Vale News Release: US$ 690 million Cobalt Stream unlocks Vale’s Voisey’s Bay Mine Expansion
View Reserves & Resources