VANCOUVER, August 8, 2012 /PRNewswire/ --
TSX: SLW NYSE: SLW
Silver Wheaton Corp. ("Silver Wheaton" or the "Company") (TSX:SLW) (NYSE:SLW) is pleased to announce that it has agreed to acquire from HudBay Minerals Inc. ("Hudbay") (TSX:HBM) (NYSE:HBM) 100% of the life of mine silver production from its currently producing 777 Mine ("777"), located in Canada, and 100% of the life of mine silver production from its Constancia Project ("Constancia"), located in southern Peru. In addition, Silver Wheaton has agreed to acquire 100% of the life of mine gold production from Hudbay's 777 Mine until Constancia satisfies a completion test, or the end of 2016, whichever is later. At that point, Silver Wheaton's share of gold production from 777 will be reduced to 50% for the remainder of the mine life.
Silver Wheaton will pay Hudbay total cash consideration of US$750 million, of which US$500 million is payable upon closing, with two further payments of US$125 million each to be made upon the satisfaction of minimum capital expenditures having been incurred at Constancia. In addition, Silver Wheaton 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) or the prevailing market price per ounce of silver and gold delivered.TRANSACTION HIGHLIGHTS
- Provides Immediate Cash Flow
- Silver Wheaton will receive 100% of the silver production from Hudbay's currently producing flagship mine, 777, and will also receive 100% of the gold production until the later of the completion of Constancia or the end of 2016, at which point Silver Wheaton will receive 50% of the gold production from 777 for the remainder of the mine life;
- Average annual attributable production from 777 is anticipated to be approximately 4.2 million silver equivalent ounces, including 0.82 million ounces of silver and 68,000 ounces of gold [ 1 ], until the end of 2016;
- Silver Wheaton's total forecast 2012 silver equivalent production increases from 27 million ounces to approximately 28 million ounces, including 42,000 ounces of gold [ 1 ].
- Significantly Increases Long Term Growth Profile
- Combined, 777 and Constancia will increase Silver Wheaton's average annual silver equivalent production by approximately 4.9 million ounces [ 1 ];
- Silver Wheaton's total forecast 2016 silver equivalent production increases from 43 million ounces to approximately 48 million ounces (including 100,000 ounces of gold [ 2 ]), an increase of 90% from 2011.
- Further diversifies Silver Wheaton's portfolio of low-cost and long-life mines with exciting exploration upside
- Staged upfront payments relating to the construction of Constancia aligns Silver Wheaton with Hudbay's capital spending schedule
- Initial payment of US$500 million to come from Silver Wheaton's existing cash balance of US$997 million at the end of the first quarter of 2012.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV