777 (Canada)

other page

Project Overview

The 777 mine is an underground copper, zinc, gold, and silver mine located within the Flin Flon Greenstone Belt (“FFGB”), immediately adjacent to Hudbay’s principal concentrator in Flin Flon, Manitoba. Development of the 777 mine commenced in 1999 and commercial production began in 2004. The anticipated mine life is until 2020.

Ore produced at the 777 mine is transported to Hudbay’s Flin Flon concentrator for processing into copper and zinc concentrates. Copper concentrate is sold to third party purchasers and zinc concentrate is sent to Hudbay’s Flin Flon zinc plant where it is further processed into special high grade zinc before being sold to third party purchasers.

777 is located within the FFGB in the Canadian Shield. Within the Canadian Shield are large, deformed remnants of ancient volcanic-sedimentary terrain known as greenstone belts, which historically have been proven locations of base and precious metals. The orebodies of the FFGB occur in an early Proterozoic island-arc assemblage that stretches for an exposed length of 250 kilometres east-west and 75 kilometres north-south. The deposits are copper-zinc volcanogenic massive sulfide (VMS) type, rich in gold and silver, and hosted in both felsic and mafic volcanic rocks, with the felsic type hosting the largest deposits.

Precious Metal Purchase Agreement

On August 7, 2012, Wheaton Precious Metals entered into an agreement with Hudbay to acquire 100% of the life of mine silver production and 100% of the life of mine gold production from Hudbay’s 777 mine until the later of the end of 2016 or until Hudbay’s Constancia mine satisfied a completion test, which it did at the end of 2016, after which the gold stream was reduced to 50% for the remainder of the mine life.

Wheaton Precious Metals paid Hudbay cash consideration of US$455 million. In addition, Wheaton Precious Metals will make ongoing payments of the lesser of US$5.90 per ounce of silver and US$400 per ounce of gold (both subject to an inflationary adjustment of 1% beginning in the fourth year) or the prevailing market price per ounce of silver and gold delivered. Wheaton Precious Metals will not share in any ongoing capital or exploration expenditures at the various mines.

Aljustrel (Portugal)

other page

Project Overview

The Aljustrel copper-zinc-lead-silver mine is located in Portugal and is 100% owned by I’M SGPS, a private company who purchased the mine from Lundin Mining Corporation in early 2009. The mine was on care and maintenance for fourteen years prior to being restarted by Lundin in December 2007. In November 2008, Aljustrel was placed back on care and maintenance following a decline in metal prices.

Aljustrel has been operated sporadically by I’M SGPS since 2008. As part of an agreement with I'M SGPS dated July 16, 2014, Wheaton Precious Metals agreed to waive its rights to silver contained in copper concentrate at the Aljustrel mine but retains a stream on future silver that may be produced from the zinc and lead ores.

Precious Metal Purchase Agreement

Wheaton Precious Metals acquired Silverstone Resources Corp. in May 2009, giving Wheaton Precious Metals the right to purchase 100% of the life of mine silver production from the Aljustrel mine site for the lesser of US$3.90 per ounce of silver (subject to an annual inflationary adjustment) or the prevailing market price per ounce of silver delivered.

Cotabambas (Peru)

Cotabambas

Project Overview

The Cotabambas copper-gold-silver deposit is located in Peru, South America, and has been systematically explored since 1995. Cotabambas is located in the mountainous terrain of the high Andean Cordillera. Elevations on the property vary between approximately 3,000 and 4,000 metres. The region is characterized by deeply incised river valleys and canyons such as the Apurimac River valley that is 2,000 metres below the Cotabambas Project area.

The Ccalla and Azulccacca zones of the Cotabambas deposit are considered to be examples of porphyry copper deposits. The two host porphyries cover an area about 2.5 kilometres long and 1.5 kilometres wide. Mineralization occurs in hypogene, supergene enrichment and oxide zones within the host porphyries and surrounding diorites. A well-developed leached cap hosts the oxide mineralization. Mineralization occurs as disseminated chalcopyrite and pyrite, pyrite-chalcopyrite stringers or veinlets, and quartz–chalcopyrite–pyrite veinlets. Sulphide mineralization consists of chalcopyrite and pyrite, and gold grades are strongly correlated to copper grades in the hypogene zone. Silver grades are not as strongly correlated to copper grades as they are to gold grades, but are generally elevated where copper–gold mineralization is present. Cotabambas retains exploration potential and Panoro has a number of geophysical, geochemical, structural and principal component analysis targets that could support further work. Panoro considers nine targets to have exploration potential for porphyry and skarn style mineralization.

Early Deposit Precious Metal Purchase Agreement

On March 21, 2016, Wheaton Precious Metals entered into a definitive Early Deposit precious metal purchase agreement with Panoro Minerals Ltd. in respect of the Cotabambas project. Wheaton Precious Metals will be entitled to purchase 100% of the silver production and 25% of the gold production from the Cotabambas project until 90 million silver equivalent ounces attributable to Wheaton Precious Metals have been delivered, at which point the stream would drop to 66.67% of silver production and 16.67% of gold production for the life of mine. Under the Cotabambas early deposit agreement, Wheaton Precious Metals will pay a total cash consideration of US$140 million plus an ongoing production payment of the lesser of: i) US$5.90 for each silver ounce and US$450 for each gold ounce (both subject to a 1% annual inflation adjustment starting in the fourth year after the completion test is satisfied) and ii) the prevailing market price. Once certain conditions have been met, Wheaton Precious Metals will advance US$14 million of the total cash upfront consideration, spread over up to nine years.

Keno Hill (Canada)

Keno Hill

Project Overview

Alexco Resource Corp. (“Alexco”) commenced production of its silver-lead-zinc Bellekeno mine, located within the Keno Hill District (“District”) in Yukon, Canada, in the third quarter of 2010. The District is historically one of the highest-grade and most prolific silver producing areas in the world. According to the Yukon Government's published Minfile database, from 1913 to 1989, the 240 square kilometre area, which comprises more than 30 historic mines, produced more than 217 million ounces of silver with average grades in excess of 40 ounces per tonne silver, 5% lead, and 3% zinc. The Bellekeno mine, one of the world's highest-grade silver mines with a production grade of up to 1,000 grams per tonne, was Canada's only operating primary silver mine from 2011 to 2013. The conventional flotation mill has a planned production rate of 250 tonnes per day and the mine employs primarily cut and fill mining methods.

Alexco is currently in interim suspension of operations at Bellekeno in order to decrease costs and reposition the District for long-term, sustainable operations. Alexco is rapidly exploring other promising high-grade silver prospects on its other District properties, and has discovered two important new deposits - the Flame & Moth and Bermingham. The continuing discoveries of some of the largest deposits ever in the District point to the prolific and prospective nature of Keno Hill.

Precious Metal Purchase Agreement

On October 2, 2008, Wheaton Precious Metals entered into a silver purchase agreement with Alexco to purchase 25% of the life of mine payable silver produced from the Keno Hill district for an upfront cash payment of US$50 million plus a payment equal to the lesser of US$3.90 (subject to an inflationary adjustment starting in year four after the achievement of specific operating targets) and the prevailing market price per ounce of delivered silver.

On March 29, 2017, the Company and Alexco agreed to amend the Alexco silver purchase agreement to adjust the silver production payment so that it will be a percentage of the spot silver price that increases with lower mill silver head grades and lower silver prices, and decreases with higher mill silver head grades and higher silver prices, subject to certain ceiling and floor grades and prices. In addition, the outside completion date was extended to December 31, 2019. As consideration, Alexco issued three million common shares of Alexco to Wheaton Precious Metals. The area of interest for the Alexco silver purchase agreement includes properties currently owned by Alexco and properties acquired by Alexco in the future which fall within a one kilometre radius of existing Alexco holdings in the Keno Hill district.

Kutcho (Canada)

Los Filos

Project Overview

The Kutcho property is located approximately 100 kilometres east of Dease Lake in the Liard mining division of northern British Columbia, and consists of one mining lease and 46 mineral exploration claims covering an area of approximately 17,060 hectares. The site is accessible via a 900 metre long gravel airstrip located 10 kilometres from the deposit and a 100 kilometre long seasonal road from Dease Lake suitable for tracked and low-impact vehicles.

The Kutcho property lies within the King Salmon Allochthon, a narrow belt of Permo-triassic island arc volcanic rocks and Jurassic sediments, situated between two northerly-dipping thrust faults: the Nahlin fault to the north, and the King Salmon fault to the south. The belt of volcanic rocks is thickest in the area where it hosts the VMS deposits, partly due to primary deposition, but also to stratigraphic repetition by folding and possibly thrusting.

The Kutcho project is envisioned to be an underground mining operation, supplemented by a starter pit on the Main deposit during the construction phase, to extract ore from the Main and Esso deposits. Two underground mining methods are proposed: sublevel longhole stoping for areas where the dip is greater than 50°, and mechanized cut and fill with paste backfill in shallow dipping areas of less than 50°. A 2,500 tpd process plant is assumed to operate 365 days per year at 92% availability, with mill feed to be crushed, ground and subsequently subjected to copper and zinc flotation.

Early Deposit Precious Metals Purchase Agreement

On December 15, 2017, Wheaton Precious Metals entered into an Early Deposit Precious Metals Purchase Agreement to purchase 100% of the silver and gold production from the Kutcho Project until 51,000 ounces of gold and 5.6 million ounces of silver have been delivered, at which point the stream will decrease to 66.67% of silver and gold production for the life of mine.

Wheaton will pay a total cash consideration of US$65 million plus an ongoing production payment of 20% of the spot silver and gold price. Of the US$65 million total upfront amount, US$7 million will be advanced to Kutcho Copper Corp. on an early deposit basis, which will be used for purposes of funding a definitive feasibility study, environmental study and impact assessment, and other related documents.

Los Filos (Mexico)

Los Filos

Project Overview

The Los Filos gold-silver mine is located in the Nukay mining district of central Guerrero State in southern Mexico. The Los Filos operation consists of two open pit mines (Los Filos and El Bermejal) and one underground mine, with common heap leach, wet plant and ancillary facilities to produce a final gold doré product on site. The open pit operation began commercial production in January 2008.

The ore bodies at Los Filos consist of iron-gold skarn with minor amounts of copper and silver at the intrusive-limestone contact. Ore bodies also occur with endoskarn and are disseminated within the hydrothermally altered intrusive rocks. The mineralogy of the contact ore bodies is predominantly iron oxides with gold, in associations with lesser quantities of copper, lead, zinc, and arsenic occurring in carbonates and oxides as well as sulfides. Primary minerals are hematite, magnetite, and jasper with lesser amounts of pyrite, chalcopyrite, and arsenopyrite.

Precious Metal Purchase Agreement

On October 15, 2004, Wheaton Precious Metals entered into a silver purchase agreement with Goldcorp to purchase 100% of the payable silver production from the Los Filos mine until the end of 2029 for a production payment of the lesser of US$3.90 (subject to an annual inflationary adjustment) and the prevailing market price for each ounce of silver delivered under the agreement.

Effective April 7, 2017 Leagold Mining Corporation acquired the Los Filos mine. In connection with the acquisition, the Los Filos silver purchase agreement was amended to include a corporate guarantee from Leagold. Goldcorp’s guarantee of deliveries in respect of the Los Filos mine remains in place.

Stratoni (Greece)

Stratoni

Project Overview

The Stratoni mine is an underground lead-zinc-silver mine located approximately 4 kilometres from the coastal town of Stratoni in northern Greece. The mine is 100% owned by Hellas Gold S.A., which is 95% owned by Eldorado Gold Corporation and 5% owned by Aktor S.A., Greece's largest construction company. The deposit is a lead-zinc-silver carbonate replacement deposit that is hosted within marble of the Kerdilya Formation. The deposit is localized along the south dipping Stratoni Fault, a major structural feature and important mineralizing corridor in the centre of the Stratoni region. Stratoni has been in operation since September 2005 and produces high quality lead-silver and zinc concentrates. The mine has a capacity of 1,200 tonnes per day and utilizes conventional drift-and-fill mining methods.

Precious Metal Purchase Agreement

On April 23, 2007, Wheaton Precious Metals entered into a silver purchase agreement with European Goldfields Limited, which was acquired by Eldorado Gold Corporation on February 24, 2012, to purchase 100% of the life of mine payable silver produced from the Stratoni mine for an upfront cash payment of US$57.5 million, plus a payment equal to the lesser of US$3.90 per ounce of silver (subject to an annual inflationary adjustment) and the then prevailing market price per ounce of silver delivered. During the term of the silver purchase agreement, Wheaton Precious Metals has a right of first refusal on any future sales of silver streams from any other mine owned by European Goldfields or Hellas Gold, or any of their affiliates.

In October 2015, in order to incentivize additional exploration and potentially extend the limited remaining mine life of Stratoni, Wheaton Precious Metals and Eldorado agreed to modify the Stratoni silver purchase agreement. The primary modification was 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) US$2.50 per ounce of silver delivered if 10,000 metres of drilling is completed outside of the existing ore body and withinWheaton Precious Metals' defined area of interest (“Expansion Drilling”); (ii) US$5.00 per ounce of silver delivered if 20,000 metres of Expansion Drilling is completed; and (iii) US$7.00 per ounce of silver delivered if 30,000 metres 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.

Toroparu (Republic of Guyana)

Toroparu

Project Overview

The Toroparu gold-copper project is located in the Republic of Guyana, South America. Discovered in 2007, the Toroparu Project has Proven and Probable mineral reserves of 4.1 million ounces of gold contained in 127 million tonnes of ore at a grade of 1.00 g/t Au. The Toroparu Project and surrounding gold anomalies lie at the edge of a large bending zone in the Puruni Shear Corridor, a regional feature that can be traced more than 100 kilometres into the prolific Venezuelan Gold District.

The project has its Environmental Authorization, Mineral Agreement and Fiscal Stability Agreement in place. A pre-feasibility study completed for the Toroparu Project in 2013 at US$1400/oz gold outlined the design of an open pit mine producing 228,000 ounces of gold per year over an initial 16-year mine life. Sandspring has signed a Memorandum of Understanding with the Guyana Government giving Sandspring exclusive rights to develop the Kurupung Hydro Project, approximately 50 kilometres south of the Toroparu Project. Optimizing the project’s power supply by building the proposed run-of-river hydroelectric facility could significantly reduce the estimated operating cash cost.

Early Deposit Precious Metal Purchase Agreement

On November 12, 2013, Wheaton Precious Metals entered into an Early Deposit precious metal purchase agreement for 10% of the life of mine gold production from Toroparu for total cash consideration of US$148.5 million plus an ongoing production payment of the lesser of US$400 (subject to a 1% annual inflation adjustment starting in the fourth year after the completion test is satisfied) and the prevailing market price.

In addition, the Early Deposit precious metal purchase agreement was amended in April 2015 to include the acquisition of 50% of the payable silver at Toroparu for up-front cash payments totaling US$5 million. Sandspring was entitled to receive US$2.0 million of the incremental US$5.0 million cash payment in four equal installments over the course of 2015, which have since been paid. In addition Wheaton Precious Metals will make ongoing payments to Sandspring of the lesser of the market price and $3.90 per payable ounce of silver delivered to Wheaton Precious Metals over the life of the Toroparu project (subject to a 1% annual increase starting on the fourth anniversary of production). Wheaton Precious Metals has also extended the due date for the final feasibility study to December 31, 2017. As a result of the addition of the silver stream to the Early Deposit precious metal purchase agreement, Wheaton Precious Metals will now pay Sandspring a total upfront cash consideration of US$153.5 million, of which US$15.5 million of the upfront cash consideration has been paid to date, with the balance of the additional US$138 million payable on an installment basis to partially fund construction of the mine.

Metates (Mexico)

Metates

Project Overview

The Metates gold-silver property (“Metates”) is located in Mexico and is owned by Chesapeake Gold Corp. Metates is one of the largest, undeveloped disseminated gold and silver deposits in the world. The pre-feasibility study of Metates envisions a conventional truck and shovel open pit mining operation at a 120,000 tonnes per day throughput. Crushed ore will be fed to a conventional SAG and ball mill circuit followed by a single stage flotation plant to produce a bulk sulphide concentrate. This concentrate would then be transported downhill to the processing site where the sulfides are oxidized in an autoclave circuit prior to cyanidation to recover the gold and silver. Given the high-sulfide nature of the concentrate, the autoclave process will produce large quantities of acid that need to be neutralized. The neutralization process would have been a significant cost for the operation and this drove the decision for Chesapeake to propose to transport the concentrate slurry via a 127 kilometre pipeline to a plant within Chesapeake’s limestone concessions. The concentrate solution also contains dissolved zinc and copper that may be recovered during the course of neutralization.

Royalty Agreement

On August 7, 2014, Chesapeake entered into an agreement whereby Chesapeake assigned its interest in the 1.5% net smelter returns royalty on Metates to Wheaton Precious Metals, for US$9.0 million. As part of the agreement, Chesapeake has the right at any time for a period of five years to repurchase two-thirds of the royalty for US$9.0 million, with Wheaton Precious Metals continuing to hold a 0.5% royalty interest. In addition, Wheaton Precious Metals has a first refusal on any future silver stream or royalty with Chesapeake on Metates.