As per Barrick Gold Corporation's ("Barrick") second quarter 2012 MD&A, initial production at their world-class gold-silver Pascua-Lama project has been delayed due to lower than expected productivity. Initial production, previously expected in mid-2013, is now expected in mid-2014, with an approximate 50 to 60 percent increase in capital costs from the top end of its previously announced estimate of $4.7 to $5.0 billion. During the second quarter, the project achieved critical milestones with completion of Phase 1 of the pioneering road and also the water management system in Chile, both of which enabled the commencement of pre-stripping activities.
Until December 31, 2015, Silver Wheaton will be entitled to all or a portion of the silver production from Barrick's Veladero, Pierina and Lagunas Norte mines, to the extent Pascua-Lama is operating below 75% of design capacity. Once in production, Pascua-Lama is forecast to be one of the largest and lowest cost gold mines in the world with an expected mine life in excess of 25 years. In its first full five years of operation, Silver Wheaton's attributable silver production is expected to average nine million ounces annually.
Zinkgruvan -Silver Wheaton's second quarter 2012 attributable silver production from the Zingruvan mine was a record 673,000 ounces, an increase of 63% compared to the second quarter of 2011. As per Lundin Mining Corporation's July 25, 2012 disclosure, metal production year-to-date is at all time highs due to high ore grades, good recoveries and record throughput levels. Produced But Not Yet Delivered - Payable silver equivalent ounces produced but not yet delivered to Silver Wheaton by its partners fell by almost one million ounces to approximately 3.2 million silver equivalent payable ounces at June 30, 2012. The reduction was primarily due to the sale of a substantial portion of the stockpiled concentrates at Glencore International AG's Yauliyacu mine. Detailed mine by mine production and sales figures can be found in the Appendix of this press release and in Silver Wheaton's Management's Discussion and Analysis ("MD&A") in the 'Results of Operations and Operational Review' section.