Silver Wheaton Corp. said Wednesday it signed off on the proposed sale of a Goldcorp Inc. mine in San Dimas, Mexico.
Silver Wheaton is a silver streaming company, which means it buys silver and gold from mines at fixed prices and seeks to profit from higher prices for those metals. It bought silver from the San Dimas mine from Goldcorp, but Goldcorp is planning to sell the mine to Mala Noche Resources Corp. in a $500 million deal.
The Canadian company's silver purchase agreements were set to expire in 2029, but they will be extended for the life of the mine. For the first four years after the sale closes, Mala Noche will make an annual payment to Silver Wheaton equal to the first 3.5 million ounces of payable silver taken from the San Dimas mine, and 50 percent of any excess. Silver Wheaton will also get an additional 1.5 million ounces of silver from Goldcorp each year.
After that, Mala Noche will make payments equal to the first six million ounces of silver and 50 percent of any excess. Goldcorp guarantees that Mala Noche will deliver all silver owned to Silver Wheaton until 2029 and guarantees that Silver Wheaton will be paid 50 cents per ounce if Silver Wheaton does not receive at least 220 million ounces by the end of 2031
Silver Wheaton will have a right of first refusal on any metal stream or similar deal.
Silver Wheaton's approval was required as a condition of closing.