Stay updated with Canadian Investment Immigration and Canadian Economy: Canada's silver producer Wheaton Precious Metals Corp. has announced an agreement to acquire 50% of the gold production service life of the Constancia project from Hudbay Minerals for $135 million. The silver purchase agreement concerning 100% of the mine's silver service life for the Constancia project made by Wheaton Precious Metals Corp. in August 2012 has now been amended to include 50% of the service life for gold production (“New Agreement”).
The average annual gold production from Constancia is expected to be approximately 35,000 ounces in the first five years. The mine service life is currently estimated at around 16 years.
Hudbay will retain 50% of the gold production. The timing of the initial payment is tied to the capital expenditures at Constancia. Wheaton Precious Metals Corp. may choose to pay the initial fee in cash or via company shares.
It is projected to reach 42.5 million silver equivalent ounces by 2017, including 210,000 ounces of gold. The silver equivalent production in 2013 is still expected to exceed 33.5 million ounces, including 145,000 ounces of gold.