Download now: Gold and Silver Mining Stocks

Silver Wheaton (TSX: SLW) Strikes Gold Deal

Agreement with Vale SA (NYSE: VALE)

Written by Swagato Chakravorty
Posted February 7, 2013 at 3:31PM

Silver Wheaton Corp. (TSX: SLW) of Vancouver, Canada has stated that it has reached an agreement with a Vale SA (NYSE: VALE) subsidiary to acquire gold production from two of the company's mines.

For the remainder of the operational lifetime of Vale's Salobo mine in Brazil, Silver Wheaton will receive 25 percent of production, the Globe and Mail reports. It will also receive 70 percent of the production for the next twenty years from Vale’s Ontario mine.

Silver Wheaton is to pay $1.9 billion cash in addition to 10 million of the company’s warrants carrying a strike price of $65 for a 10-year term.

As well, it will pay $400 per gold ounce delivered, adjusting for inflation and market pricing.

The Globe and Mail reports:

“Partnering with Vale on two new gold streams represents a significant step forward for Silver Wheaton and for the streaming model as a whole,” Silver Wheaton president and chief executive officer Randy Smallwood said in a release.

The deal has yet to be approved by Vale’s board of directors, but Silver Wheaton has already updated its guidance moving forward.

For the present year, silver equivalent production is projected at 33.5 million silver equivalent ounces inclusive of 145 thousand ounces of gold, and for 2017, the numbers are expected to be 53 million silver equivalent ounces, inclusive of 180 thousand ounces of gold.

Related Articles

Buy Dips in Gold
In the end, large-scale gold purchases by central banks can't help but build the bullish case for all precious metals, especially gold, over the next decade or two.
Don't Sell Gold
Christian DeHaemer explains why gold is soon to be money under new secret, international banking rules. Only 92 days remain before this goes into effect...
Gold Price Cycle
Gold price peaks have been following a 21 to 22 month cycle since 2006... When will it peak again?


What is the benefit of the email subscription?
While the Wealth Daily website offers access to the articles and reports, as a newsletter subscriber you will be among the first to receive access to the valuable advice, delivered directly to your inbox daily, and you will have access to deals on our exclusive services.
Who Owns Most of the World's Gold?
4% of the World Controls 12.6% of the Gold
Volkswagen: The Dumbest Car Company on the Planet
Will Volkswagen Expedite the Demise of the Internal Combustion Engine?
Organic Farmland Investing
Marc Faber and the Millionaire Farmer
There's No Escaping Austrian Economics
Fed Bubble is Popping
Marijuana Legalization and the Case for Liberty
The Case for Cannabis Legalization