Silver Wheaton acquires life of mine silver and gold production from
Augusta's Rosemont Project
TSX: SLW
NYSE: SLW
TRANSACTION TERMS
Silver Wheaton will pay Augusta upfront cash payments totaling US$230 million to acquire an amount equal to 100% of all payable silver and gold produced from Rosemont, for the lesser of US$3.90 per ounce of silver and US$450 per ounce of gold (both subject to an inflationary adjustment) or the prevailing market price per ounce of silver and gold delivered. The upfront payments will be made on an installment basis to partially fund construction of the mine and will commence once certain milestones are achieved, including the receipt of key permits and securing the necessary financing to complete construction of Rosemont. Augusta anticipates that key operating permits will be received in the fourth quarter of 2010 allowing mine construction to commence shortly thereafter. Silver Wheaton is not required to contribute to further capital or exploration expenditures and Augusta has provided a completion guarantee with certain minimum production criteria required to be met by specific dates.
"We are very pleased to be participating in the development of another low-cost, long-life and high-quality mining project," said
"We began initial discussions with Augusta in 2007 and, upon completion of a positive updated Feasibility Study, re-commenced our negotiations. The result is a precious metals agreement on a high-quality asset which will add long term value to Silver Wheaton's shareholders for many years to come."
ABOUT ROSEMONT COPPER PROJECT
The Rosemont Copper Project is a copper-molybdenum-silver porphyry deposit located in Pima County, Arizona. Based on a positive Feasibility Study released in
Based on the updated Feasibility Study released in
Current proven and probable reserves at Rosemont contain 62.9 million ounces of silver, measured and indicated resources contain a further 9.7 million ounces of silver and inferred resources contain 11.2 million ounces of silver (see the reserves and resources table below). In addition, there is potential for continued reserve and resource expansion adjacent to the proposed open pit. The precious metals purchase agreement also encompasses all of the prospective exploration targets within the Rosemont Project area, where surface mapping and historical drilling have uncovered several promising areas of mineralization.
Currently, there are no reported gold reserves and resources at Rosemont as drill cores were not consistently assayed for gold. However, metallurgical testing completed by Augusta has indicated that, in addition to silver, gold is present in the copper concentrates in the form of a saleable byproduct credit. Augusta forecasts that up to 15 thousand ounces of gold may be produced annually.
The silver reserves and resources at Rosemont attributable to Silver Wheaton are as follows:
------------------------------------------------------------------------- Proven & Probable Silver Reserves Attributable to Silver Wheaton ------------------------------------------------------------------------- Proven Probable Proven & Probable ------------------------------------------------------------------------- Process Cont- Cont- Cont- Reco- Tonnage Grade ained Tonnage Grade ained Tonnage Grade ained very Mt g/t Moz Mt g/t Moz Mt g/t Moz % ------------------------------------------------------------------------- 128.8 4.46 18.5 366.8 3.77 44.5 495.6 3.95 62.9 77 ------------------------------------------------------------------------- ----------------------------------------------------------------- Measured & Indicated Silver Resources Attributable to Silver Wheaton ----------------------------------------------------------------- Measured Indicated Measured & indicated ----------------------------------------------------------------- Cont- Cont- Cont- Tonnage Grade ained Tonnage Grade ained Tonnage Grade ained Mt g/t Moz Mt g/t Moz Mt g/t Moz ----------------------------------------------------------------- 7.2 3.89 0.9 103.0 2.65 8.8 110.2 2.73 9.7 ----------------------------------------------------------------- ---------------------- Inferred Silver Resources Attributable to Silver Wheaton ---------------------- INFERRED ---------------------- Cont- Tonnage Grade ained Mt g/t Moz ---------------------- 163.0 2.15 11.2 ---------------------- Notes: 1. Mineral Reserves and Mineral Resources have been calculated in accordance with the standards of the Canadian Institute of Mining, Metallurgy and Petroleum and National Instrument 43-101. 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. The Mineral Resources reported in this table are exclusive of Mineral Reserves. 4. Mineral Resources which are not Mineral Reserves, do not have demonstrated economic viability. 5. Mineral Resources are reported as of October 22, 2008, Mineral Reserves are reported as of March 17, 2009. 6. William L. Rose, P.E., Principal Mining Engineer (WLR Consulting Inc) is the Qualified Person responsible for the resource estimation. 7. Robert Fong, P.Eng., Principal Mining Engineering Consultant (Moose Mountain Technical Services) is the Qualified Person responsible for the reserve estimation. 8. Mineral Reserves are reported above an NSR cut-off of US$3.56/short ton which has been calculated using appropriate metallurgical recoveries and metal prices of $1.75/lb Cu, $15.00/lb Mo and $10.00/oz Ag. 9. Mineral Resources and Mineral Reserves do not include Oxide material since the SX/EW leach process does not recover silver. 10. Mineral Resources are reported above a cut-off of 0.2% Cu. 11. Silver is produced as a by-product metal; therefore, the economic cut-off applied to the reporting of silver reserves and resources will be influenced by changes in the commodity prices of other metals at the time. 12. Process recoveries are the average percentage of silver in a saleable product (dore or concentrate) recovered from mined ore at the applicable site process plants as reported by the operators.
CONFERENCE CALL
A conference call will be held on
Dial toll free from Canada or the US: 1-888-231-8191 Dial from outside Canada or the US: 1-647-427-7450 Live audio webcast: www.silverwheaton.com
Participants should dial in five to ten minutes before the call.
The conference call will be recorded and you can listen to an archive of the call by one of the following methods:
Dial toll free from Canada or the US: 1-800-642-1687 Dial from outside Canada or the US: 1-416-849-0833 Pass code: 56815204 Archived audio webcast: www.silverwheaton.com
Salman Partners Inc. acted as Silver Wheaton's financial advisor in respect of this transaction.
CAUTIONARY NOTE REGARDING FORWARD LOOKING-STATEMENTS
The information contained herein contains "forward-looking statements" within the meaning of the
CAUTIONARY LANGUAGE REGARDING RESERVES AND RESOURCES
For further information on Mineral Reserves and Mineral Resources and on Silver Wheaton more generally, readers should refer to Silver Wheaton's Annual Information Form for the year ended
Cautionary Note to
For further information: Brad Kopp, Vice President, Investor Relations, Silver Wheaton Corp., Tel: 1-800-380-8687, Email: [email protected], Website: www.silverwheaton.com
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