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Wheaton Precious Metals (NYSE:WPM) said late Tuesday it entered a gold stream agreement with Lumina Gold (OTCQX:LMGDF) for the Cangrejos gold-copper mine in Ecuador for $300M.
Cangrejos is forecast to be a high-margin mine in the lowest half of the cost curve, with a 26-year mine life; it is expected to produce 24K oz/year of gold for the first 10 years, and more than 4.5K oz/year for the life of the mine.
Under the deal terms, Wheaton (WPM) will buy 6.6% of the gold from the mine until 700K oz have been delivered, and then the stream will be reduced to 4.4% of the gold production for the life of the mine.
Wheaton (WPM) said the mine will raise total estimated proven and probable gold reserves by 760K oz, measured and indicated gold resources by 250K oz, and inferred gold resources by 160K oz.
In addition, Wheaton (WPM) said it sees strong exploration potential within the Cangrejos property.
The mine is expected to "provide accretive, long-term growth as well as significant exploration potential," Wheaton (WPM) President and CEO Randy Smallwood said.
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