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Precious Metals Streaming

Precious metals streaming allows Wheaton Precious Metals to purchase, in exchange for an upfront payment, the by-product silver or gold production of a mine that it does not own or operate. The operating costs that Wheaton Precious Metals pays for future production are pre-determined in the agreements, typically between US$4 to US$6 per ounce of silver and US$400 per ounce of gold produced, with a small inflationary adjustment in most contracts. This amount offsets our partners’ typical cost to produce an ounce of silver or gold.

Predictable costs reduce our shareholders’ downside risk while at the same time providing the upside to increases in the precious metals price. As well, other than the initial upfront cash payment, Wheaton Precious Metals typically does not contribute to future capital expenditures or exploration costs invested by the mine; yet it benefits from the production and exploration growth that results from these expenditures. This business model often translates into significant value creation for Wheaton Precious Metals shareholders.

Silver and Gold Interests

The following table summarizes the Company's commitments to make per-ounce cash payments for silver and gold to which it has the contractual right pursuant to the precious metal purchase agreements:

  Attributable Payable production to be purchased per ounce cash payment1,2    
Silver and Gold Interests Silver Gold Other Silver
Gold Other Term of Agreement Date of original Contract
San Dimas 100%3 0%   $4.32 -   Life of Mine 2004-10-15
Peñasquito 25% 0%   $4.13 -   Life of Mine 2007-07-07
Salobo 0% 75%   - $400   20 years 2013-02-28
Sudbury 0% 70%   - $400   20 years 2013-02-28
Antamina 33.75% 0%   20% of Spot -   Life of Mine 2015-11-03
Constancia 100% 50%4   $5.905 $4005   Life of Mine 2012-08-07
Other                
  Los Filos 100% 0%   $4.34 -   25 years 2004-10-15
  Zinkgruvan 100% 0%   $4.29 -   Life of Mine 2004-12-08
  Yauliyacu 100%6 0%   $8.807 -   Life of Mine 2006-03-23
  Stratoni 100% 0%   $4.228 -   Life of Mine 2007-04-23
  Minto 100%9 0%   $4.14 $31810   Life of Mine 2008-11-20
  Neves-Corvo 100% 0%   $4.22 -   50 years 2007-06-05
  Aljustrel 100%11 0%   $4.22 -   50 years 2007-06-05
  Keno Hill 25% 0%   variable12 -   Life of Mine 2008-10-02
  Pascua-Lama 25% 0%   $3.90 -   Life of Mine 2009-09-08
  Rosemont 100% 100%   $3.90 $450   Life of Mine 2010-02-11
  Loma de La Plata 12.5% 0%   $4.00 -   Life of Mine n/a 15
  777 100% 50%   6.085 4125   Life of Mine 2012-08-07
  Voisey's Bay
  Cobalt18		     42.4%     18% of spot Life of Mine  June 2018
Early Deposit

 

 

  Toroparu 50% 10%   $3.90 $400   Life of Mine  2013-11-11
  Cotabambas 100%16 25%16   $5.90 $450   Life of Mine 2016-03-21
  Kutcho 100%17 100%17   20% of spot 20% of spot   Life of Mine  2017-12-15
  1. Subject to an annual inflationary adjustment with the exception of Loma de La Plata and Sudbury.
  2. Should the prevailing market price for silver or gold be lower than this amount, the per ounce cash payment will be reduced to the prevailing market price, with the exception of Yauliyacu where the per ounce cash payment will not be reduced below $4.30 per ounce, subject to an annual inflationary factor.
  3. Wheaton Precious Metals is committed to purchase from Primero a per annum amount equal to the first 6 million ounces of payable silver produced at San Dimas and 50% of any excess.
  4. Gold recoveries will be set at 55% for the Constancia deposit and 70% for the Pampacancha deposit until 265,000 ounces of gold have been delivered to the Company.
  5. Subject to an increase to $9.90 per ounce of silver and $550 per ounce of gold after the initial 40 year term.
  6. Wheaton Precious Metals is committed to purchase from Glencore a per annum amount equal to the first 1.5 million ounces of payable silver produced at Yauliyacu and 50% of any excess.
  7. Should the market price of silver exceed $20 per ounce, in addition to the $8.80 per ounce, the Company is committed to pay Glencore an additional amount for each ounce of silver delivered equal to 50% of the excess, to a maximum of $10 per ounce, such that when the market price of silver is $40 or above, the Company will pay Glencore $18.80 per ounce of silver delivered.
  8. In October 2015, in order to incentivize additional exploration and potentially extend the limited remaining mine life of Stratoni, Wheaton Precious Metals and Eldorado Gold agreed to modify the Stratoni silver purchase agreement. The primary modification is to increase the production price per ounce of silver delivered to Wheaton Precious Metals over the current fixed price by one of the following amounts: (i) $2.50 per ounce of silver delivered if 10,000 meters of drilling is completed outside of the existing ore body and within Wheaton Precious Metals’ defined area of interest (“Expansion Drilling”); (ii) $5.00 per ounce of silver delivered if 20,000 meters of Expansion Drilling is completed; and (iii) $7.00 per ounce of silver delivered if 30,000 meters of Expansion Drilling is completed. Drilling in all three cases must be completed by December 31, 2020, in order for the agreed upon increase in production price to be initiated.
  9. The Company is committed to acquire 100% of the first 30,000 ounces of gold produced per annum and 50% thereafter.
  10. In October 2017, in order to incentivize Capstone Mining Corp. (Capstone) to extend to Minto mine life, the Company agreed to amend the Minto precious metal purchase agreement. The primary modification is to increase the production payment per ounce of gold delivered to Wheaton Precious Metals over the current fixed price in periods where the market price of copper is lower than $2.50 per pound. In consideration for this contract amendment and certain other agreements made between the Company and Capstone, the Company received shares of Capstone with a value of $8 million.
  11. Wheaton Precious Metals only has the rights to silver contained in concentrate containing less than 15% copper at the Aljustrel mine.
  12. The production payment related to the Keno Hill silver interest is a function of the silver head grade and silver spot price in the month in which the silver is produced.
  13. As per Barrick’s disclosure, closure activities were initiated at Pierina in August 2013.
  14. Wheaton Precious Metals’ attributable silver production is subject to a maximum of 8% of the silver contained in the ore processed at Veladero during the period.
  15. Terms of the agreement not yet finalized.
  16. Once 90 million silver equivalent ounces attributable to Wheaton Precious Metals have been produced, the attributable production to be purchased will decrease to 66.67% of silver production and 16.67% of gold production for the life of mine.
  17. Once 51,000 ounces of gold and 5.6 million ounces of silver have been produced, the stream will decrease to 66.67% of silver and gold production for the life of mine.
  18. Stream is effective January 1, 2021. Once 31 million pounds of cobalt are delivered, the stream drops to 21.2% of cobalt for the life of mine. Production payment is set at 18% of the cobalt spot price until the value of the upfront cash consideration is reduced to zero, then the production payment is 22% of the cobalt spot price.
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