Tag Archives: silver wheaton

John Rubino: Huge Miner Bankruptcies Possible Soon; Great News For Gold And Silver, Bad News For Streaming Companies?

By John Rubino, Jan 13, 2016

The commodities bust may be about to claim some brand-name victims:

Freeport-McMoRan Inc: The Hits Just Keep Coming

Freeport-McMoRan (NYSE:FCX) is off to a brutal start in 2016 with its stock price down nearly 40% in just over a week. The company is being battered by a barrage of negative news items, with the latest being another analyst downgrade. The rough start, which follows a very tough 2015, has a lot of investors wondering if the company will make it through the year in one piece.

The weakness in the copper price has been the biggest weight on Freeport-McMoRan’s stock this year. Its price recently hit a six-year low due to growing concerns of a worsening slowdown in China, which is the world’s biggest copper market. With copper falling below $2 per pound it calls into question Freeport-McMoRan’s ability to generate sufficient cash flow to both manage its debt and fund its capex plan. It’s a plan that is based on a $2 copper price in 2016 and $45 per barrel for oil. Presently, copper is a few pennies below that level, while oil has plunged into the low $30s.

Those price weaknesses not only will weigh on the company’s cash flow, but are weighing on the value of oil and copper assets. That’s making it even less attractive for Freeport-McMoRan to pursue asset sales to pay down its large debt load. In fact, asset values have fallen so steeply that one Jefferies analyst is concerned that “window of opportunity for Freeport-McMoRan to repair its balance sheet may have closed.” That’s after the company has yet to find a funding solution for its oil and gas business after searching for alternatives for more than a year.

———————-

Glencore Debt Swaps Jump to Six-Year High as Copper Price Slides

(Bloomberg) – The cost of insuring Glencore Plc’s debt against default rose to a more than six-year high as the price of raw materials such as copper continued to tumble.

The trader and miner’s credit default swaps increased to as much as 946 basis points, the highest since April 2009 on a closing basis, according to data from S&P Capital IQ’s CMA.

Slumping commodity prices have battered Glencore, prompting it to scrap a dividend payment, sell new shares and outline asset sales as it seeks to curb debt to maintain its investment-grade rating. Copper dropped to a six-year low amid a rout in metals as muted Chinese inflation increased concern that demand from the world’s largest buyer of raw materials will slow.

“CDS levels are driven by commodity prices and in the case of Glencore, especially copper,” said Max Mihm, a Frankfurt-based portfolio manager at Union Investment, which holds Glencore bonds among assets totaling about $271 billion. “If prices fall further and stay low Glencore will need to do more to protect its IG ratings.”

A lot of big, diversified miners produce silver and gold as byproducts, so if, say, a copper mine closes because of that metal’s recent price collapse, that also takes precious metals out of the production stream and other things being equal raises their price. So far so good for gold bugs.

But fans of gold and silver streaming companies, including this writer, are watching the carnage in copper and oil with mixed emotions. Many of the miners now teetering on the edge of insolvency have cut deals in which they promise to sell their byproduct gold and silver to streaming companies in return for big up-front payments. That money may now be at risk.

Franco Nevada, the biggest streaming company, recently paid Canadian miner Teck Resources $610 million for a future share of the silver produced by the latter’s Peruvian mine. The number two streaming company, Silver Wheaton, has paid Glencore and Vale over $1 billion for portions of the gold and silver produced by some of their mines.

What happens if some of these miners subsequently go bankrupt? That’s not clear, but it can’t be good for the streaming companies whose cash will be tied up (at best) and might simply disappear.

Meanwhile, the never-ending precious metals bear market is producing a steady drumbeat of smaller gold and silver mining failures, some of which are streaming company partners. Most recently, Rubicon Gold fell to effectively zero after announcing that oops, its reserves were only one-tenth of what it had previously promised. Streaming company Royal Gold is on the hook for $75 million to this one.

Looking on the bright side, the streaming companies are highly diversified, with dozens of deals spread around the world. So the failure of any one — even a big one — probably isn’t an existential threat. It is, however, a near-term problem for buyers of these stocks. But also possibly a long-term opportunity if the streaming companies get swept down in the general carnage.

This article is written by John Rubino of Dollarcollapse.com and with his kind permission, Gecko Research has been privileged to publish his work on our website. To find out more about Dollarcollapse.com, please visit:

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John Rubino: The Most Interesting Story In Gold

By John Rubino, Sep 25, 2015

Or: Gold Miners’ Doom Is Streaming Companies’ Boom.

The gold and silver miners are in crisis, as metal prices hover around break-even for many and capital dries up for most. Dozens of companies are one or two quarters away from running out of cash and closing down, and their executives are ready to deal.

This is, in short, the part of the cycle when the smart money sets itself up to make a fortune in the next bull market. Chief among this bunch are the streaming companies that finance developing mines in return for a share of future production.

In good times they do all right but find it hard to cut deals on favorable terms because the miners have access to cheap capital from less discerning banks and equity investors. But at the bottom of bear markets — like now — the streaming companies find themselves virtually alone in the industry in having both cash and an interest in putting it to work. Miners who need financing to survive now have nowhere else to turn, and the streaming companies are feasting. Here’s a recent Bloomberg profile of the biggest of them:

Franco-Nevada Mulls Credit as `Hokey’ Streaming Goes Mainstream

For Franco-Nevada Corp., the best time to take on debt is at the bottom of a market. The day may be approaching for the Canadian royalty and streaming company as the commodity rout boosts demand for alternative funding.“There are so many opportunities out there, we might have to dip into our credit lines,” Chief Executive Officer David Harquail said in an interview last week from his Toronto offices. “The ideal is you lever yourself up at the very bottom of the bear market and hopefully, if you’ve called it right, then you really benefit as the market turns around.”

Streaming companies like Franco-Nevada, Silver Wheaton Corp. and Royal Gold Inc. give miners upfront payments in exchange for the right to buy metals at a discount in the future. Franco-Nevada also does royalty agreements, tying portions of production to land titles.

Plunging metal prices, with copper down 24 percent and gold 11 percent in the past year, combined with surging credit costs and volatile stock markets, have made streaming attractive even for majors such as Barrick Gold Corp. and Freeport-McMoRan Inc., giving the business more credibility.

“It’s something that’s gone from being seen as kind of hokey, to where now every major company and their CFO has to consider it among their financing options,” Harquail said.

Unused Credit
With no debt, about $610 million in cash, plus $110 million in marketable equities and an unused line of credit worth about $1 billion, the company has plenty of scope for more deals. “Without going back to the equity markets, right now, we’ve got one and a half billion to play with,” Harquail said.

Two types of deals have become more common in recent years, Harquail said. Medium-sized producers are turning to royalty and streaming companies for help buying assets from larger miners. Lundin Mining Corp.’s purchase of Freeport’s Candelaria copper mine, which Franco-Nevada helped finance in exchange for a gold and silver stream, is a case in point, he said.

Also, the largest producers are now willing to sell streams on their most prized assets, Harquail said. “We’re getting the opportunity to bid on some of the best mines in the world.”

For an idea of how much things have changed in mining, consider Glencore. With a 2011 market cap of $100 billion, it could have swallowed all the streaming companies without getting indigestion. Then commodities tanked and Glencore’s stock crashed — and now it’s scrounging for the funds to keep its mines afloat:

Glencore in talks on streaming deals on Chile, Peru mines

(Reuters) – Glencore is in talks with Franco-Nevada Corp, Silver Wheaton Corp, Royal Gold, and Osisko Royalties to sell portions of the future production of three South American copper mines. One source said on Wednesday the talks could expand to include other Glencore mines.

The longer the gold/silver bear market grinds on, the more desperate the miners become and the better deals the streaming companies receive. And when prices rebound — as they will (since if they don’t the mining industry will collapse and supplies will dry up) the streaming companies will generate massive cash flow.

Here’s what this meant for the market values of the biggest streaming companies following the 2008 precious metals bear market:

Streaming companies Sept 2015 revised

Will they do this again? No. They should do a lot better because the 2008 precious metals bear market lasted less than a year, which was too little time for the proper amount of panic to take hold. This bear market has been grinding on for three years, and now the miners are out of cash and desperate, which should allow far more ounces to be bought at bargain basement prices — and far more cash to be generated on those ounces when prices start rising.

This article is written by John Rubino of Dollarcollapse.com and with his kind permission, Gecko Research has been privileged to publish his work on our website. To find out more about Dollarcollapse.com, please visit:

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NEWS: Silver Wheaton provides details of annual and special meeting of shareholders and files Form 40-F

Mar 31, 2015

Silver Wheaton Corp. (“Silver Wheaton” or the “Company”) (TSX:SLW) (NYSE:SLW) announces that its Form 40-F report has been filed with the Securities and Exchange Commission and is available on EDGAR. The Company’s 2014 audited financial statements, along with its Form 40-F, are also available on the Company’s website at www.silverwheaton.com.

Shareholders may also receive a copy of Silver Wheaton’s audited financial statements, without charge, upon request to Silver Wheaton’s Investor Relations Department, Suite 3150, 666 Burrard St., Vancouver, British Columbia, Canada V6C 2X8 or to info@silverwheaton.com.

Annual and Special Meeting of Shareholders

Silver Wheaton will hold its Annual and Special Meeting of Shareholders in the Mackenzie Ballroom of the Fairmont Waterfront Hotel, 900 Canada Place Way, Vancouver, British Columbia, Canada, on Thursday May 21, 2015, at 1:00 p.m. Pacific Time.

A live audio webcast of the Annual Meeting of Shareholders will be available at www.silverwheaton.com and will also be archived for later access.

Full release

NEWS: Silver Wheaton announces closing of US$800 million bought-deal common share financing

Mar 17, 2015

Silver Wheaton Corp. (“Silver Wheaton” or the “Company”) (TSX:SLW) (NYSE:SLW) has closed its previously announced bought-deal common share financing. A total of 38,930,000 common shares of Silver Wheaton were sold at a price of US$20.55 per share (the “Offering”), for aggregate gross proceeds to Silver Wheaton of approximately US$800 million. Silver Wheaton intends to use the net proceeds to fund the Company’s acquisition of an additional 25% gold stream from Vale S.A.’s Salobo Mine, located in Brazil (as announced March 2, 2015).

The Offering was made through a syndicate of underwriters led by Scotiabank and included BMO Nesbitt Burns Inc., CIBC World Markets Inc., RBC Dominion Securities Inc., Merrill Lynch Canada Inc., TD Securities Inc., GMP Securities L.P., Macquarie Capital Markets Canada Ltd., National Bank Financial Inc., Canaccord Genuity Corp., HSBC Securities (Canada) Inc., Morgan Stanley Canada Ltd., Raymond James Ltd., UBS Securities Canada Inc., Credit Suisse Securities (Canada) Inc., Mitsubishi UFJ Securities (USA), Inc. and Salman Partners Inc.

The Offering was completed by way of a short form prospectus in all of the provinces of Canada and was registered in the United States pursuant to a registration statement filed under the Canada/U.S. multi-jurisdictional disclosure system. These documents may be accessed for free by visiting SEDAR at sedar.com or EDGAR at sec.gov. A written prospectus relating to the Offering may be obtained upon request in Canada by contacting Scotiabank, Equity Capital Markets (Tel: 1-416-862-5837), Scotia Plaza, 66th Floor, 40 King St. West, M5W 2X6, Toronto, Ontario, and, in the United States, by contacting Scotiabank, Equity Capital Markets (Tel: 1-212-225-6853), 250 Vesey Street, 24th Floor, New York, NY 10281.

Full release

NEWS: Silver Wheaton Acquires Additional Gold Stream From Vale’s Salobo Mine

Mar 2, 2015

Silver Wheaton Corp. (“Silver Wheaton” or the “Company”) (TSX:SLW) (NYSE:SLW) is pleased to announce that its wholly-owned subsidiary, Silver Wheaton (Caymans) Ltd. (“Silver Wheaton Caymans”), has agreed to acquire from a subsidiary of Vale S.A. (“Vale”) (NYSE:VALE) an amount of gold equal to 25% of the life of mine gold production from its Salobo mine, located in Brazil. This acquisition is in addition to the 25% of the Salobo gold production that Silver Wheaton acquired in 2013. The Company will pay Vale cash consideration of US$900 million for the increased gold stream. In addition, Silver Wheaton will make ongoing payments of the lesser of US$400 (subject to a 1% annual inflation adjustment commencing in 2017) and the prevailing market price for each ounce of gold delivered under the agreement. The original gold purchase agreement, dated February 28, 2013, has been amended to provide for the additional 25% stream.

TRANSACTION HIGHLIGHTS

  • Provides immediate production and cash flow
    • Silver Wheaton will receive an additional 25% of the gold production from Vale’s Salobo mine, entitling the Company to a total of 50% of the life-of-mine gold production from the mine.
    • This immediately increases Silver Wheaton’s production and cash flow profile by adding expected average gold production of 70,000 ounces per year for the first 10 years and 60,000 ounces per year over the first 30 years (5.0 million and 4.3 million silver equivalent ounces1, respectively).
    • Significant expansion and exploration potential exists at Salobo, which currently has an extensive reserve base and good depth potential.
    • Subsequent to the closing of this acquisition, Silver Wheaton’s estimated Proven and Probable gold reserves increase by 3.3 million ounces, Measured and Indicated gold resources increase by 0.8 million ounces, and Inferred gold resources increase by 0.4 million ounces.
    • Over the next five years, gold as a percentage of Silver Wheaton’s forecasted production is estimated to grow to over 40%.

_____________________________
1 Silver equivalent production forecast assumes a gold/silver ratio of 72:1

  • Increases Silver Wheaton’s growth profile
    • Silver Wheaton is also pleased to announce its updated production guidance, which includes the additional stream from Salobo. In 2015, Silver Wheaton forecasts 43.5 million ounces of silver equivalent production1 (including 230,000 ounces of gold) growing to 51 million ounces of silver equivalent production1 (including 325,000 ounces of gold) in 2019.

 

“The Salobo mine is one of Silver Wheaton’s cornerstone assets and we are fortunate to have the opportunity to double our gold production from this high-quality mine,” said Randy Smallwood , Silver Wheaton’s President and Chief Executive Officer. “Since we founded our company ten years ago, we have had a clear vision of the characteristics of our ideal asset. To start, the asset is managed by a strong operating partner and is located in a low political-risk jurisdiction. Furthermore, it is primarily a base metal producer where precious metals represent only a relatively small portion of the mine’s overall economics. Vale’s Salobo mine possesses all of these characteristics, while also offering over 40 years of defined mine life as well as the potential for significant exploration and expansion upside. Salobo is certainly one of the best assets we have ever seen and one that readily lends itself to streaming.”

“With over 70% of global silver production sourced as by-product, we continue to believe that the silver market represents the largest market for streaming opportunities. However, Silver Wheaton has never been averse to strategically layering additional gold into the streaming mix when the right opportunity presents itself.”

TRANSACTION TERMS

Silver Wheaton Caymans has agreed to acquire from a subsidiary of Vale an additional 25% of the life of mine gold production from Vale’s Salobo mine. Production will accrue retroactively to Silver Wheaton Caymans as of January 1, 2015.

Silver Wheaton Caymans will pay Vale cash consideration of US$900 million for the increased gold stream. In addition, Silver Wheaton Caymans will make ongoing payments of the lesser of US$400 (subject to a 1% annual inflation adjustment commencing in 2017 for the Salobo stream) and the prevailing market price, for each ounce of gold delivered under the agreement. The terms of the existing gold stream on Salobo were modified so that the annual inflation adjustment that was scheduled to start in 2016 will now start coincident with this stream in 2017.

Vale is in the process of ramping up mill throughput at the Salobo mine to 24 million tonnes per annum (“Mtpa”). If throughput capacity is expanded within a predetermined period, Silver Wheaton Caymans will be required to make an additional payment to Vale, relative to the 50% stream, based on a set fee schedule that now ranges from US$88 million if throughput is expanded beyond 28 Mtpa by January 1, 2036, up to US$720 million if throughput is expanded beyond 40 Mtpa by January 1, 2018.

_____________________________
1 Silver equivalent production forecast assumes a gold/silver ratio of 72:1

 

FINANCING THE ACQUISITION

To pay the initial upfront cash payment of US$900 million, Silver Wheaton intends to use cash on hand together with the net proceeds of an equity offering announced concurrently as of today’s date (the “Offering”). Silver Wheaton may also use amounts borrowed under its existing revolving credit facility.

ABOUT THE SALOBO MINE

According to Vale’s public filings, the Salobo mine, located in the Pará state of Brazil, is the largest copper deposit in Brazil. This low-cost copper-gold mine was commissioned in November 2012 with a design throughput capacity of 12 Mtpa and subsequently expanded to 24 Mtpa of mill capacity in mid-2014. The mine is well-positioned relative to infrastructure and is connected to the national power grid.

The Salobo mine has total estimated Mineral Reserves of 1.179 billion tonnes grading 0.35 g/t gold1, and, along with additional Mineral Resources, also has substantial exploration and expansion potential. The acquisition of an additional 25% life of mine gold stream adds an estimated 3.3 million ounces of Proven and Probable Mineral Reserves, 0.8 million ounces of Measured and Indicated Mineral Resources, and 0.4 million ounces of Inferred Mineral Resources attributable to Silver Wheaton. Total estimated attributable Mineral Reserves and Mineral Resources for the now 50% life of mine gold stream are detailed in the table below.

SILVER WHEATON ANNOUNCES NEW PRODUCTION GUIDANCE

Silver Wheaton is pleased to provide its updated one and five-year production guidance, which incorporates the additional 25% life of mine gold stream on the Salobo mine. In 2015, Silver Wheaton’s estimated attributable silver equivalent production is forecast to be 43.5 million silver equivalent ounces2, including 230,000 ounces of gold. In 2019, estimated annual attributable production is anticipated to increase over 40% compared to 2014 levels, growing to approximately 51 million silver equivalent ounces2, including 325,000 ounces of gold.

The additional ounces from Salobo to our production profile as well as the ramp-up of Hudbay Minerals Inc.’s (“Hudbay”) Constancia mine in 2015 more than offset the anticipated reduction in attributable production from other assets in Silver Wheaton’s current streaming portfolio. Hudbay’s Constancia mine is expected to meet the completion test well before 2016, resulting in gold production from the 777 mine attributable to Silver Wheaton dropping from 100% to 50% in 2017. In addition, the 10-year term contract on Capstone Mining’s Cozamin mine, acquired with Silver Wheaton’s 2009 acquisition of Silverstone, expires in April 2017. Finally, as Hudbay provides no formal production guidance for its Rosemont project, Silver Wheaton no longer includes any production from the Rosemont project in its production forecast for 2019. As a reminder, Silver Wheaton also does not include any production from Barrick Gold Corp.’s Pascua-Lama project in its guidance.

_____________________________
1 Silver Wheaton has previously filed a technical report for the Salobo mine dated March 19, 2013, which is available on SEDAR at www.sedar.com. Silver Wheaton has updated certain technical disclosure on Salobo in this news release and in a preliminary short form prospectus filed today. For further details of the Salobo mineral reserves, see the tables appended to this news release.
2 Silver equivalent production forecast assumes a gold/silver ratio of 72:1

SILVER WHEATON ANNOUNCES 2014 PRODUCTION AND SALES VOLUME1

Silver Wheaton reports that attributable silver equivalent production for the year ended December 31, 2014, was 35.3 million ounces, compared to 35.8 million ounces in 2013, representing a decrease of 1.5%.

The Company reports silver equivalent sales volume for the year ended December 31, 2014, was 32.9 million ounces, compared to 30.0 million ounces in 2013, representing an increase of 9.8%.

SILVER WHEATON ANNOUNCES UPDATED RESERVES AND RESOURCES

As of December 31, 2014, and detailed in the tables at the end of this news release, Proven and Probable Mineral Reserves attributable to Silver Wheaton were 757.7 million ounces of silver compared to 781.3 million ounces reported by the Company in its management’s discussion and analysis for the quarter ended September 30, 2014, a decrease of 3%, and 9.27 million ounces of gold compared to 6.09 million ounces, an increase of 52%. On an attributable Measured and Indicated basis, silver resources were 549.5 million ounces compared to 569.4 million ounces reported by the Company in its management’s discussion and analysis for the quarter ended September 30, 2014, a decrease of 3%, and gold resources were 2.76 million ounces compared to 1.92 million ounces, an increase of 43%. On an attributable Inferred Resource basis, silver resources were 275.2 million ounces compared to 298.7 million reported by the Company in its management’s discussion and analysis for the quarter ended September 30, 2014, a decrease of 8%, and gold resources were 1.46 million ounces compared to 1.03 million ounces, an increase of 41%.

The tables at the end of this news release set forth the estimated mineral reserves and mineral resources (silver and/or gold only) for the 27 mining assets which are subject to the Company’s precious metal purchase agreements, adjusted where applicable to reflect the Company’s percentage entitlement to silver and/or gold produced from such assets, as of December 31, 2014, unless otherwise noted. The tables are based on information available to the Company as of the date of this news release, and therefore will not reflect updates, if any, after such date.

Mr. Neil Burns , Vice President of Technical Services, is a “qualified person” as such term is defined under National Instrument 43-101, and has reviewed and approved the technical disclosure in this news release including information on mineral reserves and mineral resources.

__________________________
1
Silver equivalent basis assumes a 61:1 Ag:Au ratio for 2013 and 67:1 Ag:Au ratio for 2014

CONFERENCE CALL

A conference call will be held on Monday, March 2, 2015, starting at 5:00pm (Eastern Time) to discuss this transaction. To participate in the live call please use one of the following methods:

Proven & Probable Reserves Attributable to Silver Wheaton  (1,2,3,8,18)
As of December 31,
2014 unless
otherwise noted (6)
Proven Probable Proven & Probable
Tonnage Grade Contained Tonnage Grade Contained Tonnage Grade Contained Process Recovery (7)
Mt g/t Moz Mt g/t Moz Mt g/t Moz
SILVER
Peñasquito (25%) (14)
Mill 84.1 33.3 90.0 52.7 25.0 42.4 136.7 30.1 132.4 53-65%
Heap Leach 10.9 31.7 11.1 11.5 25.0 9.2 22.4 28.3 20.4 22-28%
San Dimas (10, 14) 0.9 345.2 10.3 4.0 307.3 39.2 4.9 314.5 49.5 94%
Pascua-Lama (25%) (14) 8.0 69.8 17.9 73.2 64.1 150.8 81.2 64.7 168.7 82%
Lagunas Norte (11) 12.4 4.5 1.8 52.9 4.5 7.7 65.3 4.5 9.5 19%
Veladero (11) 5.5 14.8 2.6 90.5 14.8 43.2 96.0 14.8 45.8 6%
Yauliyacu (11, 12) 0.8 123.5 3.1 3.4 109.8 11.9 4.1 112.4 15.0 85%
777 (13) 4.9 24.7 3.9 5.7 24.7 4.5 10.6 24.7 8.4 64%
Neves-Corvo
Copper 4.9 38.8 6.1 20.5 36.1 23.8 25.4 36.6 29.9 35%
Zinc 10.4 73.1 24.4 10.2 66.9 22.0 20.6 70.0 46.4 20%
Rosemont (15) 279.5 4.1 37.0 325.8 4.1 43.1 605.3 4.1 80.1 76%
Constancia 506.0 3.1 50.3 114.0 2.9 10.8 620.0 3.1 61.1 71%
Zinkgruvan
Zinc 7.4 87.0 20.6 4.2 51.0 6.9 11.6 73.9 27.5 87%
Copper 3.3 35.0 3.7 0.1 35.0 0.1 3.4 35.0 3.8 78%
Stratoni 0.5 174.0 2.9 0.3 182.0 1.5 0.8 176.7 4.5 84%
Minto 3.8 5.9 0.7 5.7 5.7 1.0 9.5 5.7 1.8 78%
Cozamin (11)
Copper 2.8 43.8 4.0 2.8 43.8 4.0 72%
Los Filos 48.8 5.7 8.9 198.4 5.0 32.2 247.2 5.2 41.1 5%
Metates Royalty (20) 4.1 18.0 2.3 13.2 13.1 5.5 17.2 14.2 7.9 76%
TOTAL SILVER 297.8 459.9 757.7
GOLD
Salobo (50%) (16) 331.7 0.39 4.13 257.9 0.31 2.57 589.6 0.35 6.70 66%
Sudbury (70%) (11) 54.3 0.39 0.68 54.3 0.39 0.68 81%
777 (13) 3.5 1.81 0.21 4.1 1.81 0.24 7.7 1.81 0.45 73%
Constancia (50%) 253.0 0.05 0.42 57.0 0.07 0.14 310.0 0.06 0.56 61%
Minto 3.8 0.80 0.10 5.7 0.60 0.11 9.5 0.68 0.21 74%
Toroparu (10%) (17) 3.0 1.10 0.10 9.7 0.98 0.31 12.7 1.01 0.41 89%
Metates Royalty (20) 4.1 0.68 0.09 13.2 0.44 0.19 17.2 0.50 0.28 89%
TOTAL GOLD 5.04 4.23 9.27

 

 

Measured & Indicated Resources Attributable to Silver Wheaton (1,2,3,4,5,9,18)
As of December 31, 2014 unless otherwise
noted (6)
Measured Indicated Measured & Indicated
Tonnage Grade Contained Tonnage Grade Contained Tonnage Grade Contained
Mt g/t Moz Mt g/t Moz Mt g/t Moz
SILVER
Peñasquito (25%) (14)

Mill

34.4 26.1 28.9 91.7 21.5 63.5 126.2 22.8 92.4

Heap Leach

5.1 19.3 3.1 24.1 16.7 13.0 29.2 17.2 16.1
Pascua-Lama (25%) (14) 3.7 26.4 3.1 35.7 22.3 25.5 39.4 22.7 28.7
Yauliyacu (11, 12) 1.0 127.3 4.0 6.0 216.6 41.5 6.9 204.2 45.5
Neves-Corvo

Copper

5.8 48.5 9.0 25.7 50.8 42.0 31.5 50.3 51.0

Zinc

14.1 59.6 27.0 60.2 55.7 107.8 74.3 56.4 134.8
Rosemont (15) 38.5 3.0 3.7 197.7 2.7 17.1 236.2 2.7 20.8
Constancia 73.0 2.4 5.6 299.0 2.0 19.4 372.0 2.1 25.0
Zinkgruvan

Zinc

2.2 66.8 4.6 4.7 107.1 16.3 6.9 94.5 20.9

Copper

1.6 20.0 1.0 0.4 39.1 0.5 2.0 23.9 1.5
Aljustrel (19)

Zinc

1.3 65.6 2.7 20.5 60.3 39.7 21.8 60.7 42.4
Stratoni 0.2 200.4 1.5 0.2 213.3 1.4 0.4 206.4 2.9
Minto 7.5 3.6 0.9 32.3 3.4 3.5 39.8 3.4 4.3
Keno Hill (25%)

Underground

0.7 473.1 10.2 0.7 473.1 10.2

Elsa Tailings

0.6 119.0 2.4 0.6 119.0 2.4
Los Filos 11.4 11.0 4.0 112.3 7.4 26.9 123.7 7.8 30.9
Loma de La Plata (12.5%) 3.6 169.0 19.8 3.6 169.0 19.8
TOTAL SILVER 99.2 450.2 549.5
GOLD
Salobo (50%) (16) 24.6 0.47 0.37 97.7 0.37 1.16 122.2 0.39 1.53
Sudbury (70%) (11) 28.9 0.34 0.32 28.9 0.34 0.32
Constancia (50%) 36.5 0.05 0.06 149.5 0.04 0.18 186.0 0.04 0.23
Minto 7.5 0.42 0.10 32.3 0.32 0.33 39.8 0.34 0.43
Toroparu (10%) (17) 0.9 0.87 0.03 7.9 0.83 0.21 8.8 0.84 0.24
TOTAL GOLD 0.56 2.20 2.76

 

 

Inferred Resources Attributable to Silver Wheaton (1,2,3,4,5,9,18)
As of December 31,
2014 unless otherwise
noted (6)
Inferred
Tonnage Grade Contained
Mt g/t Moz
SILVER
Peñasquito (25%) (14)

Mill

4.4 19.5 2.7

Heap Leach

6.1 13.7 2.7
San Dimas (10, 14) 7.3 309.5 73.0
Pascua-Lama (25%) (14) 4.9 20.1 3.2
Yauliyacu (11, 12) 5.0 178.7 28.7
777 (13) 0.8 30.6 0.8
Neves-Corvo

Copper

25.1 43.5 35.1

Zinc

21.4 48.9 33.6
Rosemont (15) 104.5 3.3 11.1
Constancia 200.0 1.9 12.0
Zinkgruvan

Zinc

6.1 75.0 14.7

Copper

0.5 34.0 0.6
Aljustrel (19)

Zinc

8.7 50.4 14.0
Stratoni 0.5 169.0 2.7
Minto 16.2 3.2 1.7
Keno Hill (25%)

Underground

0.2 349.8 2.4
Los Filos 175.9 6.3 35.7
Loma de La Plata (12.5%) 0.2 76.0 0.4
Metates Royalty (20) 1.0 9.7 0.3
TOTAL SILVER 275.2
GOLD
Salobo (50%) (16) 74.0 0.31 0.74
Sudbury (70%) (11) 5.5 0.67 0.12
777 (13) 0.4 1.77 0.02
Constancia (50%) 100.0 0.03 0.10
Minto 16.2 0.30 0.16
Toroparu (10%) (17) 13.0 0.74 0.31
Metates Royalty (20) 1.0 0.38 0.01
TOTAL GOLD 1.46

 

Notes:

1. All Mineral Reserves and Mineral Resources have been calculated in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum – CIM Standards on Mineral Resources and Mineral Reserves and National Instrument 43-101 – Standards for Disclosure form Mineral Projects (“NI 43-101), or the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.
2. Mineral Reserves and Mineral Resources are reported above in millions of metric tonnes (“Mt”), grams per metric tonne (“g/t”) and millions of ounces (“Moz”).
3. Individual qualified persons (“QPs”), as defined by the NI 43-101, for the technical information contained in this document (including the Mineral Reserve and Mineral Resource estimates) for the following operations are as follows:
a. Salobo mine – Christopher Jacobs, CEng MIMMM (Vice President and Mining Economist), James Turner, CEng MIMMM (Senior Mineral Process Engineer), Barnard Foo, P. Eng., M. Eng, MBA (Senior Mining Engineer) and Jason Ché Osmond, FGS, C.Geol, EurGeol (Senior Geologist) all of whom are employees of Micon International Ltd.
b. All other operations and development projects: the Company’s QPs Neil Burns, M.Sc., P.Geo. (Vice President, Technical Services); Samuel Mah, M.A.Sc., P.Eng. (Senior Director, Project Evaluations), both employees of the Company (the “Company’s QPs”).
4. The Mineral Resources reported in the above tables are exclusive of Mineral Reserves.  The Minto mine, Neves-Corvo mine, Zinkgruvan mine, Stratoni mine and Toroparu project report Mineral Resources inclusive of Mineral Reserves.  The Company’s QPs have made the exclusive Mineral Resource estimates for these mines based on average mine recoveries and dilution.
5. Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability.
6. Other than as detailed below, Mineral Reserves and Mineral Resources are reported as of December 31, 2014 based on information available to the Company as of the date of this document, and therefore will not reflect updates, if any, after such date.
a. Mineral Resources and Mineral Reserves for the San Dimas, Pascua-Lama, 777, Constancia and Minto mines are reported as of December 31, 2013.
b. Mineral Resources and Mineral Reserves for the Toroparu project are reported as of March 31, 2013.
c. Mineral Resources and Mineral Reserves for the Neves-Corvo and Zinkgruvan mines are reported as of June 30, 2014.
d. Mineral Reserves for the Cozamin mine are reported as of June 30, 2014.
e. Mineral Resources and Mineral Reserves for the Rosemont project are reported as of August 28, 2012.
f. Mineral Resources for the Constancia project (including the Pampacancha deposit) are reported as of September 30, 2013.
g. Mineral Resources for Aljustrel’s Feitais and Moinho mines are reported as of November 30, 2010. Mineral Resources for the Estaçao project are reported as of December 31, 2007.
h. Mineral Resources for Keno Hill’s Elsa Tailings project are reported as of April 22, 2010, Lucky Queen project as of July 27, 2011, Onek and Bermingham projects as of October 15, 2014, Flame and Moth project as of January 30, 2013, Bellekeno mine Inferred Mineral Resources as of September 30, 2012 and Bellekeno mine Indicated Mineral Resources as of September 30, 2013.
i. Mineral Resources for the Loma de La Plata project are reported as of May 20, 2009.
j. Mineral Resources for Metates are reported as of February 16, 2012 and Mineral Reserves as of March 18, 2013.
7. Process recoveries are the average percentage of silver or gold in a saleable product (doré or concentrate) recovered from mined ore at the applicable site process plants as reported by the operators.
8. Mineral Reserves are estimated using appropriate process recovery rates and the following commodity prices:
a. Peñasquito mine – $1,300 per ounce gold, $22.00 per ounce silver, $0.90 per pound lead and $0.90 per pound zinc.
b. San Dimas mine – 2.7 grams per tonne gold equivalent cut-off assuming $1,250 per gold ounce and $20.00 per ounce silver.
c. Pascua-Lama project – $1,100 per ounce gold, $21.00 per ounce silver and $3.00 per pound copper.
d. Lagunas Norte and Veladero mines – $1,100 per ounce gold and $17.00 per ounce silver.
e. Yauliyacu mine – $20.00 per ounce silver, $3.29 per pound copper, $1.02 per pound lead and zinc.
f. 777 mine – $1,250 per ounce gold, $25.00 per ounce silver, $3.00 per pound copper and $1.06 per pound zinc.
g. Neves-Corvo mine – 1.6% copper cut-off for the copper Reserve and 4.8% zinc equivalent cut-off for all the zinc Reserves, both assuming $2.50 per pound copper, $1.00 per pound lead and zinc
h. Rosemont project – $4.90 per ton NSR cut-off assuming $20.00 per ounce silver, $2.50 per pound copper and $15.00 per pound molybdenum.
i. Constancia project – $1,250 per gold ounce, $25.00 per ounce silver, $3.00 per pound copper and $14.00 per pound molybdenum.
j. Zinkgruvan mine – 3.98% zinc equivalent cut-off for the zinc Reserve and 1.5% copper cut-off for the copper Reserve, both assuming $2.50 per pound copper and $1.00 per pound lead and zinc.
k. Stratoni mine – 18.02% zinc equivalent assuming $16.50 per ounce silver, $3.00 per pound copper, $0.95 per pound lead and zinc.
l. Minto mine – 0.5% copper cut-off for Open Pit and $64.40 per tonne NSR cut-off for Underground assuming $300 per ounce gold, $3.90 per ounce silver and $2.50 per pound copper.
m. Cozamin mine – $42.50 per tonne NSR cut-off assuming $20.00 per ounce silver, $2.50 per pound copper, $0.85 per pound lead and $0.80 per pound zinc.
n. Los Filos mine – $1,300 per ounce gold and $22.00 per ounce silver.
o. Salobo mine – 0.253% copper equivalent cut-off assuming $1,250 per ounce gold and $3.45 per pound copper.
p. Sudbury mines – $1,250 per ounce gold, $22.00 per ounce silver, $10.43 per pound nickel, $3.45 per pound copper, $1,800 per ounce platinum, $1,000 per ounce palladium and $13.00 per pound cobalt.
q. Toroparu project – 0.38 grams per tonne gold cut-off assuming $1,070 per ounce gold for fresh rock and 0.35 grams per tonne gold cut-off assuming $970 per ounce gold for saprolite.
r. Metates royalty – 0.35 grams per tonne gold equivalent cut-off assuming $1,200 per ounce gold and $24.00 per ounce silver.
9. Mineral Resources are estimated using appropriate recovery rates and the following commodity prices:
a. Peñasquito mine – $1,500 per ounce gold, $24.00 per ounce silver, $1.00 per pound lead and $1.00 per pound zinc.
b. San Dimas mine – 0.20 grams per tonne gold equivalent assuming $1,300 per ounce gold and $20.00 per ounce silver.
c. Pascua-Lama project – $1,500 per ounce gold, $24.00 per ounce silver and $3.50 per pound copper.
d. Yauliyacu mine – $20.00 per ounce silver, $3.29 per pound copper and $1.02 per pound lead and zinc.
e. 777 mine – $1,250 per ounce gold, $25.00 per ounce silver, $3.00 per pound copper and $1.06 per pound zinc.
f. Neves-Corvo mine – 1.0% copper cut-off for the copper Resource and 3.0% zinc cut-off for the zinc Resource, both assuming $2.50 per pound copper and $1.00 per pound lead and zinc.
g. Rosemont project – 0.30% copper equivalent cut-off for Mixed and 0.15% copper equivalent for Sulfide assuming $20.00 per ounce silver, $2.50 per pound copper and $15.00 per pound molybdenum.
h. Constancia project – 0.12% copper cut-off for Constancia and 0.10% copper cut-off for Pampacancha.
i. Zinkgruvan mine – 3.8% zinc equivalent cut-off for the zinc Resource and 1.0% copper cut-off for the copper Resource, both assuming $2.50 per pound copper and $1.00 per pound lead and zinc
j. Aljustrel mine – 4.5% zinc cut-off for Feitais and Moinho mines zinc Resources and 4.0% zinc cut-off for Estação zinc Resources.
k. Stratoni mine – Cut-off is geological due to the sharpness of the mineralized contacts and the high grade nature of the mineralization
l. Minto mine – 0.5% copper cut-off.
m. Keno Hill mines:
i. Bellekeno mine – $185 per tonne NSR cut-off assuming $22.50 per ounce silver, $0.85 per pound lead and $0.95 per pound zinc.
ii. Flame and Moth project – $185 per tonne NSR cut-off assuming $1,400 per ounce gold, $24.00 per ounce silver, $0.85 per pound lead and $0.95 per pound zinc.
iii. Bermingham project – $185 per tonne NSR cut-off assuming $1,250 per ounce gold, $20.00 per ounce silver, $0.90 per pound lead and $0.95 per pound zinc.
iv. Lucky Queen project – $185 per tonne NSR cut-off assuming $1,100 per ounce gold, $18.50 per ounce silver, $0.90 per pound lead and $0.95 per pound zinc.
v. Onek project – $185 per tonne NSR cut-off assuming $1,250 per ounce gold, $20.00 per ounce silver, $0.90 per pound lead and $0.95 per pound zinc.
vi. Elsa Tailings project – 50 grams per tonne silver cut-off.
n. Los Filos mine – $1,500 per ounce gold and $24.00 per ounce silver.
o. Loma de La Plata project – 50 gram per tonne silver equivalent cut-off assuming $12.50 per ounce silver and $0.50 per pound lead.
p. Salobo mine – 0.296% copper equivalent assuming $1,500 per ounce gold $3.70 per pound copper.
q. Sudbury mines – $1,250 per ounce gold, $22.00 per ounce silver, $10.43 per pound nickel, $3.45 per pound copper, $1,800 per ounce platinum, $1,000 per ounce palladium and $13.00 per pound cobalt.
r. Toroparu project – 0.30 grams per tonne gold cut-off assuming $1,350 per ounce gold.
s. Metates royalty – 0.35 grams per tonne gold equivalent cut-off assuming $1,200 per ounce gold and $24.00 per ounce silver.
10. The San Dimas silver purchase agreement provides that Primero will deliver to the Company a per annum amount equal to the first 6.0 million ounces of payable silver produced at the San Dimas mine and 50% of any excess, for the life of the mine.
11. The Company’s attributable Mineral Resources and Mineral Reserves for the Lagunas Norte, Veladero, Cozamin and Yauliyacu silver interests, in addition to the Sudbury and 777 gold interests, have been constrained to the production expected for the various contracts.
12. The Company’s Yauliyacu silver purchase agreement (March 2006) with Glencore provides for the delivery of up to 4.75 million ounces of silver per year for 20 years.  In the event that silver sold and delivered to Silver Wheaton in any year totals less than 4.75 million ounces, the amount sold and delivered to Silver Wheaton in subsequent years will be increased to make up for any cumulative shortfall, to the extent production permits.  Depending upon production levels it is possible that the Company’s current attributable tonnage may not be mined before the agreement expires.
13. The 777 precious metals purchase agreement provides that Hudbay will deliver 100% of the payable silver for the life of the mine and 100% of the payable gold until completion of the Constancia project, after which the gold stream will reduce to 50%.  The gold figures in this table represent the attributable 777 mine Mineral Resources and Mineral Reserves constrained to the production expected for the 777 precious metals purchase agreement.
14. The scientific and technical information in these tables regarding the Peñasquito and San Dimas mines and the Pascua-Lama project was sourced by the Company from the following SEDAR (www.sedar.com) filed documents:
a. Peñasquito – Goldcorp Management’s Discussion and Analysis (MD&A) dated February 19, 2015;
b. San Dimas – Primero annual information form filed on March 31, 2014; and
c. Pascua-Lama – Barrick Gold Corp.’s MD&A dated February 19, 2015.
The Company QP’s have approved the disclosure of scientific and technical information in respect of the Peñasquito and San Dimas mines and the Pascua-Lama project in these tables.
15. The Rosemont mine Mineral Resources and Mineral Reserves do not include the SX/EW leach material since this process does not recover silver.
16. The Company has filed a technical report for the Salobo mine, which is available on SEDAR at www.sedar.com.
17. The Company’s agreement with Sandspring is an early deposit structure whereby the Company will have the option not to proceed with the 10% gold stream on the Toroparu project following the delivery of a bankable definitive feasibility study.
18. Silver and gold are produced as by-product metal at all operations with the exception of silver at the Keno Hill mines and Loma de La Plata project and gold at the Toroparu project; therefore, the economic cut-off applied to the reporting of silver and gold Mineral Resources and Mineral Reserves will be influenced by changes in the commodity prices of other metals at the time.
19. Silver Wheaton has agreed to waive its rights to silver contained in copper concentrate at the Aljustrel mine.
20. Effective August 7, 2014 the Company entered into an agreement for a 1.5% net smelter returns royalty on Chesapeake Gold Corp’s (Chesapeake) Metates property, located in Mexico.  As part of the agreement, Chesapeake will have the right at any time for a period of five years to repurchase two-thirds of the royalty, with the Company retaining a 0.5% royalty interest.

Full release