The Associated Press
Silver Wheaton Corp. said Wednesday that it agreed to buy all of HudBay Minerals Inc.'s silver production from two mines, along with some of the gold production from one of them, for about $750 million plus additional ongoing payments.
Under the agreement, the Vancouver-based company will get all of the silver production from HudBay's 777 Mine in Canada and Constancia project in southern Peru.
In addition, Silver Wheaton will get all of the gold production from the 777 mine until Constancia passes a completion test, or the end of 2016, whichever is later.Â At that point, Silver Wheaton's share of gold production from 777 will drop to 50 percent for the rest of the mine's life, the company said.Silver Wheaton will pay HudBay $500 million in cash when the deal closes and make two additional payments of $125 million each, when certain capital spending requirements are met at Constancia. In addition, the company said it will make ongoing payments based on the market prices and quantity of the silver and gold delivered. Silver Wheaton said it will not pay for any ongoing capital or exploration costs at the mines. The company said it plans to use cash on hand to fund the initial payment of $500 million, along with the later payments totaling $250 million. Silver Wheaton shares rose $1.51, or 5.3 percent, to $30.22 in afternoon trading Wednesday. Its shares have risen 32 percent since hitting a 52-week low of $22.94 on May 16.