Wheaton closes streaming deal with gold miner Sibanye

Stillwater mine (pictured here), is located near the town of Nye. East Boulder is located near the town of McLeod, in Montana. (Image courtesy of Sibanye-Stillwater.)

Canada’s Wheaton Precious Metals (TSX:WPM), the world’s No.1 silver streaming company and Sibanye’s (JSE: SGL) (NYSE:SBGL) closed Wednesday a deal through which Weathon buys buy all gold production from Stillwater and East Boulder mines in Montana.

Wheaton has bought all of Stillwater’s gold production for the life of the mine and, initially, also 4.5% of its total palladium output.

The Vancouver-based firm has paid the South African precious metal miner $500 million in cash upfront, which will be followed by subsequent payments equal to 18% of the spot gold and palladium prices until the reduction of the advanced payment to nil. After that, Wheaton will pay Sibanye 22% of the spot gold and palladium prices.

The transaction, said Sibanye, immediately reduces the company’s leverage and net debt.

Wheaton’s estimated proven and probable gold reserves have now increased by 410 thousand ounces and its inferred gold resources by 920 thousand ounces.

For the first time, the Canadian firm has estimated proven and probable palladium reserves of 610 thousand ounces and inferred palladium resources of 430 thousand ounces.

Wheaton’s announcement follows a similar deal it signed last month with Brazil’s Vale (NYSE: VALE) to buy cobalt mined after 2021 as a by-product from its Voisey’s Bay mine, in Canada’s northern Labrador region.

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