The original contract with Barrick provided Silver Wheaton with a completion test, requiring Barrick to complete Pascua-Lama to at least 75% of design capacity by December 31, 2015. Silver Wheaton amended the contract earlier this year, as noted in Silver Wheaton's July 1, 2013 news release, to extend the completion test deadline by one year. Given the developments announced today by Barrick and the extra year of silver production to be received from Barrick's Other Mines, Silver Wheaton has agreed to extend the completion test deadline an additional year to December 31, 2017. According to the silver purchase agreement, if the requirements of the completion test have not been satisfied by the amended completion date, the agreement may be terminated by Silver Wheaton. In such an event, Silver Wheaton will be entitled to the return of the upfront cash consideration of $625 million less a credit for any silver delivered up to that date.
"We see Barrick's decision to suspend operations until they have full access to the Pascua-Lama site as a fiscally prudent approach, which under the current circumstances, should enhance the project's capital efficiency and improve the project's economics going forward," said Randy Smallwood, Silver Wheaton's President and Chief Executive Officer. "While we would like to see more certainty regarding Pascua-Lama, we view the additional year of silver revenue from three of Barrick's other mines as adequate compensation to justify extending the outside completion test date by a year. Pascua-Lama is a world class gold and silver project, and we are encouraged by Barrick's approach to ensure better cost containment and continued investment to address social, environmental and regulatory obligations, as we view this strategy as crucial for the project moving forward. We look forward to continuing to work with Barrick."
Silver Wheaton is currently reviewing its 2017 production forecast. Production for 2013 is still expected to exceed 33.5 million silver equivalent ounces.