Silver Wheaton Increases Its Gold Stream From Salobo Mine

(RTTNews) - Silver Wheaton Corp. (SLW, SLW.TO) said that its wholly-owned subsidiary, Silver Wheaton (Caymans) Ltd. or "SWC", has agreed to acquire from a subsidiary of Vale S.A. (VALE) an additional amount of gold equal to 25% of the life of mine gold production from its Salobo mine, located in Brazil.

The acquisition is in addition to the 50% of the Salobo gold production that SWC is currently entitled to. SWC will pay upfront cash consideration of US$800 million for the increased gold stream and the 10 million Silver Wheaton common share purchase warrants previously issued to a subsidiary of Vale will be amended to reduce the strike price from US$65 to US$43.75 per common share1.

In addition, SWC will make ongoing payments of the lesser of US$400 (subject to a 1% annual inflation adjustment now commencing in 2019 on the entire 75% stream) and the prevailing market price for each ounce of gold delivered under the agreement.

SWC will receive an additional 25% of the gold production from Vale's Salobo mine, entitling SWC to a total of 75% of the life-of-mine gold production from the mine.

With the additional stream from Salobo, Silver Wheaton's estimated attributable gold production in 2016 is now forecast to be 305,000 ounces, and estimated average annual attributable gold production over the next five years (including 2016) is anticipated to be approximately 330,000 ounces per year.

Silver Wheaton intends to use cash on hand together with proceeds available under the Company's US$2 billion revolving credit facility to pay the upfront cash payment of US$800 million. The Revolving Facility has a maturity date of February 27, 2021.