Barrick Sells Production Stake To Silver Wheaton

SANDY SHORE

DENVER (AP) — Barrick Gold Corp., the world's biggest gold producer, on Tuesday agreed to sell silver reserves from four of its mines to Silver Wheaton Corp. in a deal worth $625 million.

The transaction will provide Toronto-based Barrick with a source of financing for its Pascua-Lama mining project which is under construction on the border between Argentina and Chile while it significantly boosts the size of the 5-year-old Silver Wheaton.

The Vancouver, British Columbia-based company agreed to pay $625 million in cash over three years.

Under the terms, it will make a cash deposit of $212.5 million on the first when the transaction closes, expected by Sept. 22. The remaining payments will be about $137.5 million per year.

The company also will make ongoing production payments in cash for each ounce of delivered silver. Those payments will be either the prevailing market price or $3.90 per ounce, whichever is the lesser amount.

The key mine in the deal is Pascua-Lama. Silver Wheaton will receive 25 percent of the silver production over the life the mine, expected to be at least 25 years.