Silver Wheaton Corp. (TSX:SLW,NYSE:SLW) announced that because Barrick Gold Corp. (TSX:ABX,NYSE:ABX) has decided to temporarily suspend construction at the Pascua-Lama project, the two companies have amended their silver streaming agreement.
Key details are as follows:
In Silver Wheaton’s original contract with Barrick, throughout 2014 and 2015 Silver Wheaton will be entitled to silver production from three of Barrick’s currently producing mines, the Lagunas Norte, Pierina, and Veladero mines (collectively ‘Barrick’s Other Mines’), to the extent of any production shortfall at Pascua-Lama, until Barrick satisfies the completion test.
As part of the newly revised agreement with Barrick, Silver Wheaton will now be entitled to the production from Barrick’s Other Mines for an additional year (until the end of 2016) to the extent of any production shortfall at Pascua-Lama.
Randy Smallwood, president and CEO of Silver Wheaton, commented:
We see Barrick’s decision to suspend operations until they have full access to the Pascua-Lama site as a fiscally prudent approach, which under the current circumstances, should enhance the project’s capital efficiency and improve the project’s economics going forward.
While we would like to see more certainty regarding Pascua-Lama, we view the additional year of silver revenue from three of Barrick’s other mines as adequate compensation to justify extending the outside completion test date by a year. Pascua-Lama is a world class gold and silver project, and we are encouraged by Barrick’s approach to ensure better cost containment and continued investment to address social, environmental and regulatory obligations, as we view this strategy as crucial for the project moving forward. We look forward to continuing to work with Barrick.